We may be a few months away from the tax season but that doesn’t mean we shouldn’t start preparing for it now. Here are five mistakes that CPAs and accounting firms are costing US businesses billions each year due to incorrect reporting of business income and employment values. 1) Closing the books early Understandably accountants are swamped with work during the tax season but a mistake made by many is rushing to close the books early prior to all the required data being collected. Take your time to collect the required data. Tax season starts from January. 2) Incorrectly applying and adhering to state and city tax regulations Tax laws are changing regularly and it is sometimes very difficult to keep track while keeping up with your workload. This causes firms to miss out on some of the benefits of local tax incentives. 3) Failing to use the best tables resulting in not maximizing depreciation Generally this is down to those CPA firms that do not have up-to-date accounting software or are unable to retain qualified staff. Are you one of them? If yes, it is time to make major changes. 4) Saving corporate financial/tax data to personal devices Yes, it is convenient for your employees to save the files to their devices so they can complete the work in the comfort of their home or on their commute but their devices are not always secure. That puts your company at risk. Make a point of telling your employees it is against your company policy to do so because of the risk of data being hacked or leaked. 5) Inputting data incorrectly It may sound obvious but you are inputting huge amounts of data on a day to day basis. It is very important to catch those mistakes so that you keep audit or penalty at bay. Mistakes like these are costing CPAs their reputation and are costing their clients money. If these mistakes keep occurring and clients find out, it could lead to a loss of clients. Be aware of the mistakes to ensure your firm is not one of those contributing to the billions of dollars being lost in penalties to the IRS. VISHAL KURANI Bringing forth rich marketing experience in the accounting industry, Vishal blends his wealth of knowledge and creativity to educate accountants about the pressing industry issues. He is passionate about marketing and helps accountants scale their practice through his detailed write-ups. Unauthorized copying or plagiarism of our content is a violation of intellectual property rights. We take such matters seriously and will pursue legal action to protect our original work. Anyone found engaging in such activities will be held accountable under applicable laws. Originally published Oct 10, 2017 05:10:57, updated Mar 23 2021 Topics: Don't forget to share this post! Most Popular The Future of Audit: Trends and Innovations for 2024 and Beyond Audit | 14 MIN READ Internal Audit Vs. External Audit: Key Differences You Must Know Audit | 6 MIN READ All About the Best Outsourced Bookkeeping Services for Small Business Accounting & Bookkeeping | 5 MIN READ Why CPAs and Firms Are Choosing India for Outsourcing Accounting & Bookkeeping | 7 MIN READ How Can CPAs Outsource Accounting? – Outsourced Accounting Services for Greenhorns Accounting & Bookkeeping | 5 MIN READ Get a Free Strategy to Transform Your Business Operations Resolve the talent gaps, reduce costs, and improve your margins Get a Free Consultation
