Tax accounting is crucial for any kind of business, including construction contractors who are liable to pay taxes. If a business fails to declare the revenue and pay the due taxes, then the business and its owners could face legal issues.
The construction businesses must declare the revenues from each project with different agreement terms varying from each other. This could make it challenging for a construction business to maintain the accounting records and file for taxes.
As a result the construction contractors must have a qualified accounting team or should hire a third party accounting service. This article will help you to understand why you should hire a third party tax accounting service rather than having an internal accounting team.
Cost efficient
Recruiting a separate accounting team for the business can be costly. Especially if your business is a small or a medium scale entity. You would have to pay the bonuses and other incentives to the employees in addition to their salaries.
This is not an issue with a third party service. They charge you for the service provided and you can hire them when their services are required. Therefore recruiting a third party accounting service can be cost efficient than having an internal accounting team.
More updated about changes in law
The regulatory bodies change the tax laws and accounting standards every now and then. It can be difficult for you to keep track of all the changes relevant to your business in the legal system.
The third tax accounting services are professionally qualified and has an updated knowledge about the changes in tax laws. They will keep you in line with the law and guide you to avoid legal issues.
Skilled and professional service
Accounting for construction contractors can be challenging and complex. This is since each project is unique from each other and has different conditions in their contracts.
The accounting team must identify this situation and adopt accordingly to report the respective revenues. In such situations the company must have a skilled team with considerable amount of members.
However if you decide to hire a third party tax accounting service, you will be provided with a skilled team. This team has the necessary experience and expertise to handle your tax accounting function according to the situation.
Detect the frauds and shortcomings
A third party accounting services has no control and interest over the internal operations of the business. Therefore they can’t get involved in frauds. On the contrary they will inform about the frauds and shortcomings.
One such shortcoming is under billing, which is a common problem in the construction industry. A professional third party service will detect such short comings early on and inform you to take the necessary measures.
Avoid the hassle at the year end
Financial year end can be stressful and hectic for most of the businesses, especially for construction companies. You have to declare your revenues, file for GST and annual taxes by the year end.
If you do the taxes by yourself, you would be stressed out just to do a function which could easily be outsourced. A professional tax accounting service will ease your mind from the year end hassle. They will help you to report the revenues and file for taxes on time.
Provide professional advice
A professional tax accounting service will have an expert team with the required skills and experience. As a businessman you have to identify and report your incomes accurately so that you don’t under pay or over pay the taxes.
A professional tax accounting service will advise you on how to declare your income so that you can pay the taxes accurately.
These advices can be essential to minimize legal issues and to improve the profitability of the business.
Summary
Calculating the due taxes and paying them on time is important for any kind of business to avoid legal offences. Therefore a business must have a skilled accounting team to report the revenues and file for taxes on time or hire a third party.
If you analyze the above points you will realize that using a tax accounting service can be beneficial for your business. Especially if your entity is in the construction industry operating under small or medium scale.
We are specialists in accounting and business consultations. If you are looking for a professional tax accounting service, we can help you. Our expert team has satisfied hundreds of clients over many successful years of operation. Contact our team for more information.
Source: Australian Taxation Office [1].