Meet Stewart. He’s our entrepreneurial friend who owns a web-design agency. He’s successful, he works hard, and his business is growing. Unfortunately, Stewart is also his own accountant, which means he struggles to find a balance between bookkeeping and running a company. Like many business owners and entrepreneurs, Stewart makes novice accounting mistakes due to his lack of expertise in the field.
The Problem: Amidst a pile of mail on his desk, Stewart notices an alarming envelope from the IRS. He tears it open to read a memo that makes his heart sink. He has not filed or paid payroll taxes and now owes penalties and interest on top of the principal.
The Solution: While it is vitally important to regularly deduct payroll taxes, not everyone thinks to do it. Why? Entrepreneurs aren’t accountants—and they’re not supposed to be. Attempting it is usually an unproductive and inefficient undertaking that has disastrous results.
We’ve met DIY accountants who have accumulated more than $10,000 in fines and penalties from the IRS because they inconsistently managed their taxes. Instead, set realistic expectations that won’t set you or your business up for failure. Work with an accountant who empowers and allows you to focus on what’s important—running your business.
Even with the best effort, DIY accountants often learn just enough to manage the business as it existed the year prior, not the business of today or what will come tomorrow. Don’t be like Stewart. Partner with a professional accounting service that has the foresight to see you through the complicated accounting landscape. Are you like Stewart?