Tax accountants play the pivotal role of helping individuals and businesses file tax returns at local, state, and federal levels while adhering to all laws and regulations. During the months of January through April, tax accountants typically work time intensive schedules filled with early mornings and late nights. Preparing tax returns, identifying potential fraud risks, and assisting clients with audits are just a few of the job duties in the daily life of a tax accountant. While individual tax filings come with their own challenges, handling the taxes of small businesses is an entirely different animal.
Many small businesses don’t have a team of accountants and back office staff to adequately manage documentation and paperwork. As a result, tax accountants are often left to pick up the pieces of the puzzle and hope they all fit back together. Some companies underpay taxes throughout the year and are left with tax bills at year-end. Others mismanage paper records or classify business expenses incorrectly. Businesses must carefully manage their taxes as filing incomplete or incorrect tax returns can result in financial or legal penalties.
What if there was a way to simplify the tax filing process for business owners?
The Importance of Tax Documentation
There’s a common phrase that goes, “If you didn’t document it, it didn’t happen.” In the world of tax accounting, documentation is the most critical element for protecting businesses against improper tax filings, financial penalties, and litigation.
Small businesses must manage and maintain all types of documentation to protect themselves in the event of an audit including:
- Copies of processed checks
- Tax payments
- Vehicle use documentation
- Capital-asset activity
Tax accountants must request and collect a litany of documentation from their clients to ensure proper tax compliance. Furthermore, the IRS recommends businesses keep tax returns and related documents for a minimum of three years. The problem is many small businesses don’t have the resources and staff to maintain each and every record throughout the year. Receipts get left in shoe boxes, bank statements end up drawers, and many documents get thrown away altogether. Retaining every piece of documentation can be a hassle for business owners. However, accounting automation software tools, such as Docyt, can make life easier.
Docyt Manages Your Documentation
Docyt’s accounting automation software can help small businesses track and store their documentation in a digital repository. Here’s how it works. There is a Docyt mobile app. You simply open the app, which accesses your phone’s camera, and take a photo of your receipt or any document. If you prefer, you can scan documents on your printer and then forward them to the email address associated with your Docyt account. Or you may have copies of invoices or other documents in email and you can just forward that email with the attachments to the Docyt email. You can view these in the Docyt web or mobile app.
Managing large amounts of documentation can be challenging for small business owners. Docyt seamlessly converts paper documents into digital copies. Business owners and employees can scan receipts and invoices and submit expenses directly from their phones. Furthermore, all data and documents are secure and encrypted to ensure protection against data breaches.
Make Tax Time Easier with Docyt
Many small businesses lack the resources necessary to adequately manage their accounting. Docyt’s accounting automation software can simplify tax season. Stop storing receipts in a shoebox all year long. Digitize your documents and receipts seamlessly with Docyt.
This article is the first in a three-part series describing how accounting automation can simplify tax time. In the next post, learn how you can automate categorization.
If you’ve been searching for the right tool to make tax season easier, schedule a free consultation today.