Small businesses lack continuous insight into their finances and that is their number one mistake at tax time, according to a survey conducted by Xero, the maker of beautiful accounting software. The survey polled 500 accountants and found that many small businesses only talk to an accountant when it’s time to prepare and file taxes each year.
Approximately 25 percent of the accountants surveyed prefer ongoing communication with their clients, as much as once a week throughout the year. Almost three-quarters of responders think real-time access to a client’s financials would position them to provide better tax advice.
“With online accounting software, much of the bookkeeping work can be automated and/or done remotely. For the accountant, each of those client contact touch-points can be as simple as a comment or note attached to a certain piece of financial data,” explains Jamie Sutherland, President of U.S. Operations, Xero. “For the small business owner, it’s possible to immediately view the comment or note on their iPad over Sunday brunch. The result is key business decisions get made long before tax time.”
In addition to the top mistakes small businesses make during tax season, the infographic below also shows the most commonly overlooked deductions. The top three overlooked deductions were home office, new employees and travel expenses.