Tax Preparation Services: Remarkable Impacts You Didn’t Know About

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Tax preparation is nothing but preparing tax returns by an organization or an individual. The development of tax can include income tax, excise duty, customs duty, etc. By compiling bills and relevant documents, an organization’s financial activities are considered for tax computation.

Further, it demands the process of filing tax returns with relevant tax authorities before the deadline. As a result, all large-scale business owners are overburdened with many responsibilities for ensuring a positive graph. From finances to the market, they need to deal with everything.

Nevertheless, the most intimidating and crucial task is dealing with taxes and return filing. As one needs to be very careful while doing this task, it requires expertise.

While tax preparation services are the need of the hour, let’s check how it saves over 70% of CPA firms’ costs.

Tax-Preparation-Services

Tax Preparation Services Saving Resources of CPA Firms

All businesses must deal with accounts as their outcome is profit. As a result, CPA or Certified Public Accounting Firms remain significantly occupied around the year. Nevertheless, preparing taxes and filing returns can be taxing even for niche accounting businesses.

It can be incredibly tiring to deal with a sudden on-slaught where multiple businesses compete for their services. Moreover, this task also comes with a strict deadline.

But after plenty of trial and error, the CPA firms have come up with a straightforward solution – outsourcing. Since research proves the authenticity of this specific solution, a study confirms a fantastic fact. It states that a CPA firm tends to spend 70% of its resources preparing taxes.

The resource spent can be anything from money, time, or even people. But outsourcing tax preparation can be of incredible help to the CPA firms saving the same.

Outsourcing Tax Preparation

Since preparing taxes and returning files is time-consuming, numerous entities outsource their tax preparation procedures. This ritual of outsourcing is significantly noticed in the UK, US, India, and Australia.

The primary reason behind this is the abundantly qualified tax professionals who hold significant expertise in tax preparation. In addition, you can obtain tax preparation services at a lower and affordable price.

Usually, tax professionals charge exorbitant amounts for preparing tax return files. But in places like India, the UK, the US, and Australia, tax professionals offer better price deals by not compromising quality.

Besides, they have the requisite technology and infrastructure to provide efficient tax preparation services.

Outsourced Tax Preparation Helps CPA Firms

All CPA firms can be highly benefited from outsourced tax preparation. Here are some ways how it helps the CPA firms:

Skilled and Professional Experts Conducts Tax Preparation

Even though the CPA firms have sound knowledge regarding finances, tax preparation is not their cup of tea. While dealing with the same, they spend most of their productive time—so specific niche businesses and expertise in such professions.

Skilled professionals like accountants and auditors have sound knowledge regarding CPA tax preparation. They use their logical minds to deal with tax preparation and filing returns.

The best part is that professionals from India can efficiently prepare tax returns for USA-based CPA firms. They are familiar with the task and can dedicatedly move about doing the same. Moreover, they do not require any minimal input or assistance from the CPA firms.

CPA Firms Reduce Significant Operational Costs by 70%

In-house tax preparation demands quality resources and dedicated staff. However, without considering the maintenance cost, the investment seems quite vast and unnecessary.

But when a CPA firm outsources tax preparation, they can save more than 70% of all the redundant operational costs.

Provides an Edge Over Competitors

Since tax preparation is one of the essential services of CPA firms, it takes away most of the productive time. Therefore, CPA firms can save additional resources by outsourcing time-consuming services to professionals and experts.

In other words, it can use the time instead for productive work like analyzing the financial market. Besides, you can also use the time to gain an edge over competitors.

Resource Flexibility

Preparing taxes and filing returns doesn’t necessarily require dedicated staff. And that is exactly where outsourcing comes in. This gives you an excellent opportunity to save your resources and spend only where it is necessary.

The payable tax amount entirely depends on your profits within a year. As a result, of leveraging outsourcing to calculate your taxes, the requisite resources are typically aligned for calculating taxes.

Besides, this can efficiently help save considerable time and money that you would otherwise spend on unnecessary additional resources.

Abides by a Standard and Easily Understandable Tax Preparation Procedure

Tax preparation outsourcing companies are efficient for their year-long experience. So the firms understand the entire process easily, thereby building a sense of authenticity and trust in the service.

Thus the money spent by firms is utilized on both these services and paying taxes to the government. In addition, outsourcing comes with an incredible advantage where firms can go back and enquire about any significant discrepancies.

Grants Benefit of Time for Different Time Zones

Outsourcing tax preparation services offer incredible benefits in different time zones. For example, you can outsource the tax preparation for your USA-based firm to any experts in India. The ten-hour difference allows the taxation work to be completed overnight and return the files immediately.

Enhanced Response and Customer Support

The outsourcing firms are solely responsible for tax accounting, payroll, bookkeeping, etc. Thus, they provide more focused customer support and instant response than the in-house functions where the resources are swamped.

Grants Access to the Latest Technology, Infrastructure, and Policies

Outsourced CPA tax preparation firms are continually updated with the latest technologies and tax policies. Besides, it also offers an efficiently advanced infrastructure for supporting all the technologies.

The firms achieve updated information through frequent workshops and seminars, thereby training their professionals. Associating with outsourcing in the USA can be highly beneficial, as you don’t require to spend a single penny.

How Does Outsourcing Tax Preparation Save 70% of a CPA Firm’s Cost?

By outsourcing tax preparation in the first place, the CPA firms start saving up enormous resources. They save a considerable amount that you would otherwise spend on conducting in-house tax preparation infrastructure costs.

Thus, we can rightfully state that the infrastructure resources account for 70% of the overall revenue for preparing taxes. Since these are included within the operational costs of a CPA firm, they can easily be eliminated by outsourcing.

A magazine survey states that small businesses spend 6.9% of their resources on infrastructure. On the other hand, tier two companies spend 4.1% of their revenues, while the big companies spend around 3.2%.

The average revenue spent by businesses on infrastructure ranges from 4% to 6%. One can achieve this efficiently by outsourcing the CPA tax preparations.

The resources required for labor wages also vary from country to country. Since India is the primary source of labor suppliers to major USA-based CPA firms, the labor charges vary. Owing to the difference in the currency value, this substantial difference prevails.

An employee of a USA-based CPA firm might end up charging $80 per hour for tax preparation. But outsourcing the same tasks to professionals in India, the labor charges drop to USD 15 per hour. This significant difference ends up saving massive revenues.

Besides the labor and infrastructure costs, CPA firms can access the latest technology at a significantly reduced price. It is simply because of the varying price tags of the same technology in different countries.

While the USA pays $250 to $850 for the requisite technology, India pays around $25. This reduction in technology price drops straight by 90% with the difference in geolocation. So outsourcing the tasks delivers quality work with an effectively reduced software price.

Thus, it is evident that outsourcing tax preparation services of CPA firms to Indian industry experts can reduce up to 70% of costs. After all, outsourcing tax preparation is a fantastic choice for CPA firms to relegate their resources.

This task brings in inevitable profits to the firms without overlooking the requisite duties of the financial world. Moreover, the firms will not have to worry about handling their client’s finances. Instead, outsourcing those tasks will help them emphasize the core functionalities of their business.

What Documents are Required for Tax Preparation?

Here are a few of the standard documents needed for preparing taxes and filing returns:

  • Aadhaar Number (Applicable only for India)
  • PAN or Permanent Account Number
  • TDS documents, including Form 16, Form 16A, and Form 26AS
  • Personal details and bank information of the assessee
  • Travel bills
  • Other investment proof under 80D, 80C, 80TTA, and 80E
  • Bank certificates
  • Rental agreement

The Procedure of Outsourcing Tax Preparation

The tax preparation procedure is more or less the same in different enterprises. Here is a standard step-by-step approach for preparing taxes.

Receiving Scanned Documents

The first step to outsourcing tax preparation is receiving relevant scanned documents from the clients. After receiving the requisite documents, tax professionals enter the corresponding data within the tax software.

Auditing

After the relevant data is entered within the software, tax professionals audit the tax returns. It is done to avoid errors and recheck whether all information on tax returns has correctly been entered.

Reviewing

After auditing the tax return, the tax professionals send a green signal for client review. This allows the clients to raise any queries about any significant issue.

Making Final Submission

After the tax returns have been reviewed and finalized, the final copy is submitted to the client. Finally, they file their tax returns with the desirable and relevant authority.

Get the Best Outsourcing Tax Preparation with Invensis

At Invensis, we help businesses with exclusive, easy, and hassle-free tax preparation. Our team has in-depth knowledge of various tax laws and promises to deliver maximum legal tax savings and incentives. We offer affordable, fast, and highly secure tax accounting services, keeping in mind the importance of our clients. So come, and associate with Invensis and maximize the profits and efficiency of your business while minimizing the operational costs.

FAQs

1. Which returns shall I outsource?

Choosing the returns to outsource requires careful and strategic planning. So make sure you outsource only those returns which generate maximum profit for your business.

2. How can outsourcing tax preparation benefit my business?

Outsourcing tax preparation ensures that your resources are put to the proper use. Moreover, you can invest your resources in other core business operations.

3. Can I trust Invensis with tax preparation outsourcing?

Once you outsource your tax preparations with Invensis, you can remain at peace. Besides, you get more resources to spend on other core business operations supported by professional experts.

4. What is the process of outsourcing tax preparation?

The first step is to send us your requirements. We will then assign a project manager to you who will be your single point of contact throughout the project. The project manager will work with you to understand your specific needs and requirements. Once we clearly understand your requirements, we will create a customized solution for you. The next step is to implement the solution and start working on your tax preparation. We will keep you updated at every step and deliver the completed tax preparation to you within the agreed timeframe.

5. How much does it cost to outsource tax preparation?

The cost of outsourcing tax preparation depends on the scope and complexity of the project. Contact us with your specific requirements, and we will provide you with a customized solution and price quote.

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