If you’re like many Charlotte business owners and entrepreneurs, trying to handle your taxes and cash flow can be overwhelming and confusing. After all, 82% of businesses nationwide fail due to cash flow problems, demonstrating how confusing yet important this aspect of finances is for companies.
Fortunately, tax services are available to help make the process easier for you. Having experienced professionals by your side who understand the rules of taxation fundamentals can allow you to better manage and plan out your cash flow to free up more time so that you can concentrate on running other aspects of your business.
From filing forms timely and accurately to determining potential deductions or credits, a lot goes into staying ahead of financial regulations related to taxes — but with the right tax services guidance, it doesn’t have to be so difficult. Here’s what you need to know.
Types of Cash Flow
Before diving into tax services and a cash flow management strategy, it’s helpful to understand what cash flow is.
Cash flow is the movement of money into or out of a business. It indicates a company’s overall financial health, showing the amount of money coming in and out of the business over time.
Positive cash flow indicates more money coming in than going out, while negative cash flow signals that the business has less money leaving than entering. There are also three main types of cash flow that are helpful to understand, as it’ll help figure out where taxes fit into everything.
Operating Cash Flow
Operating cash flow is the amount of money generated by a business’s regular operations over a period of time. You can calculate it by taking the cash receipts from sales and subtracting the cash payments for expenses such as wages, rent, and taxes.
Investing Cash Flow
Investing cash flow is the amount of money that a business invests in itself for long-term growth. You can calculate it by subtracting capital expenditures and investments from cash inflows from selling assets and taking out loans.
Financing Cash Flow
Financing cash flow is the money a business borrows or raises from shareholders to cover expenses. You can calculate it by taking cash payments for loan interest, stock repurchases, and dividend payments, and subtracting cash inflows from issuing shares and taking out loans.
Cash Flow & Managing Business Taxes
Do taxes have a major impact on businesses’ cash flow? You bet. They’re one of the biggest expenses for most businesses, large or small.
When taxes are due, companies must set aside money from their operating capital to pay them or risk incurring late fees and penalties. As such, it’s important for business owners to understand how their tax bill affects their cash flow.
A business’s cash flow statement typically lists taxes as an outflow of resources in the “operating activities” section. This includes paying:
- Income taxes
- Property taxes
- Other applicable taxes
Businesses must also keep track of estimated payments made throughout the year to avoid coming up short when tax time rolls around.
The bottom line? Properly calculating and tracking your taxes helps ensure your company has enough funds to cover its liabilities and maintain good financial health. Failure to do so could lead to negative cash flow and broader financial issues.
Business Tax Services: How They Help
As a business owner, professional tax services help you avoid costly mistakes. However, they can also provide valuable guidance in managing your business cash flow. Here are some ways business tax services can help manage cash flow.
Tax Planning
One of the key benefits of professional tax services is tax planning. This involves working with a tax professional to devise a strategy for managing your taxes throughout the year.
By understanding your business needs and financial goals, they can help you make informed decisions and minimize your tax liabilities. This can result in significant savings and improved cash flow.
Monitoring Tax Deadlines
Another major benefit of tax services is having someone who can monitor tax deadlines for you. Missing important deadlines can result in penalties and additional fees. This can be harmful to your cash flow. Having a tax expert on your side can ensure that your business stays compliant and avoids unnecessary fees.
Maximizing Deductions
Tax professionals can help you identify deductions and credits to minimize tax liability. This is especially important for small businesses, as every penny counts towards improving cash flow. They can help you navigate the various deductions available, such as depreciation, travel and entertainment expenses, and home office expenses.
Advice on Business Structure
Choosing the right business structure can have a big impact on your taxes and cash flow.
Professional tax services can provide valuable advice on selecting the appropriate structure for your business, whether a sole proprietorship, partnership, or corporation. They can help you understand the tax implications of each option and how they will impact your cash flow.
Peace of Mind
Overall, professional tax services can be a valuable asset for managing your business’s cash flow because they offer peace of mind. As a business owner, you’ve got a lot going on. Professionals offering accounting services or tax services help take a lot of that off your shoulders.
They can provide tax planning, monitor deadlines, maximize deductions, advise on business structure, and give you peace of mind. By investing in the right tax services, you can ensure that your business stays on track and achieves financial success.
Choosing a Tax Service
Do you need business tax consulting services for a speedy tax resolution? Perhaps you just need accounting services. Regardless, there are a few things to consider when choosing a tax service outside of just tax service costs.
Consider the following factors before choosing the right tax specialists:
- Seek recommendations from other business owners or professionals
- Look for a firm that specializes in business tax
- Choose a firm with experience in your industry
- Consider the firm’s expertise in tax planning
- Look for a firm that offers transparent pricing
- Choose a firm with reliable customer service and communication
By considering these factors, you can choose the right business tax service to help you manage your cash flow and achieve financial success.
Get Tax Services in Charlotte
Filing business taxes can be stressful and time-consuming. At Basta+Croop, we have a team of skilled accountants specializing in business tax services. We can assist you in filing your business tax returns efficiently and accurately, enabling you to focus on running your business.
Our services include business tax advice and planning, tax return compliance, self-assessment, company restructuring, research and development relief, and business tax investigations and resolutions. However, we work with all clients to develop custom solutions for their needs.
Don’t let business taxes overwhelm you. Call us at (704) 251-0110 to schedule your consultation for tax services today.