The Benefits of Outsourcing Payroll

Man buried under his payroll paperwork for his small business

Once you go into business for yourself, you discover just how much effort is involved in creating a small business. It can truly be overwhelming at times! From staffing, to equipment purchases, to taxes, there’s no shortage of headaches for a business owner to deal with. That’s why more and more business owners are choosing to outsource where they can. One of the ways you can save yourself a great deal of time, effort and money is by outsourcing payroll. Here are a few of the benefits of doing so:

You’ll save time – and time is money!

When you decided to start a business, chances are it wasn’t because you enjoyed poring over mounds of paperwork for hours on end. Nevertheless, that’s just what you may find yourself doing when trying to work out the finer details of your payroll. While it may have started off simple enough, as your business grew and expanded the payroll became more and more complicated. Every moment you spend ironing out the details of payroll is a moment you can’t devote to other business matters. Not only is this inconvenient for you, it can become downright costly. After all, your time is valuable! Any time you, or one of your valued employees, spends working on payroll is time you can’t devote to bringing more money in.

You’ll reduce errors – and save money that way, too!

Errors in your payroll can prove to be costly for your business. As you know, it’s not as simple as just paying your staff. There’s insurance, taxes (both state and federal) and a bevy of other financial considerations. If you make a mistake somewhere along the way, chances are you will shoulder a serious financial penalty as a result. For example, if you don’t calculate your taxes correctly, or if you are late on a payment, you can get hit with a fine. The easiest way to avoid all this hassle is by outsourcing payroll; put your finances in the hands of seasoned professionals and you’ll greatly reduce the chances of costly mistakes.

You’ll be a lot more adaptable

Part of what makes payroll so complex is its ever-changing nature. Tax laws are always in flux and your staffing needs are always changing too. Some weeks, your part-time employees will work many more hours than others; with every change, you’ll find yourself starting from scratch. A professional payroll service will not face this problem. They are constantly being trained in the latest changes to tax law and they’re also trained to handle a varying level of employee hours. Ensure your company can weather the ever changing business climate by outsourcing payroll.

A payroll service handles more than just paychecks

If you outsource to a reliable payroll company, they’ll do a lot more than just issue your company’s paychecks. Not only can they calculate the amount of money owed to each employee, they can also work out tax obligations for each individual. They’ll allow employees to designate a certain amount of each paycheck to a 401(k), should they wish to do so. A payroll service will also calculate how much your company owes in payroll taxes.

Outsourcing payroll

If, after reading this article, you are considering outsourcing payroll, we think that’s a great step to take for your business! Make sure you do the necessary research and contact any potential companies you are considering using. There are a few questions you should always ask. What is the cost of the service? What services will you get for that cost? How are taxes handled? Make sure to contact a few references, as well. Check to see if the service is reliable and if previous customers have been satisfied.

9 Reasons To Outsource Your Accounting Department

notepad saying your should outsource accounting vs hire

As an entrepreneur, you’re always looking for ways to cut costs and increase profits for your business. No doubt you have learned that managing a small business can be a real headache, with many challenges – some expected, some unexpected! – and you want to get a leg up whenever you can. One way you can do this is by looking for accounting services for small businesses. While you may think that outsourcing your accounting department will end up costing you more money, this doesn’t necessarily have to be the case. In fact, outsourcing can be a great way to save your small business time, money, and bring in extra profits. Here are 9 of our top reasons to outsource your accounting department:

1. You’ll Save Money on Training Costs

One of the biggest expenses incurred by any business is the cost of training; getting your employees familiar with all of their responsibilities, as well as software and other equipment, takes time and money. By hiring an accounting service for your small business, your accountants will come pre-trained and armed with expert knowledge.

2. You’ll Benefit from the Services of a Team of Experts

If you hire an in-house accountant, no matter how good they may be, they will still only be one person. A professional accounting firm will bring years of experience to bear, from a team of seasoned professionals; having extra sets of eyes studying your finances will also reduce the incidence of error, greatly improving your peace of mind.

3. You’ll Save on Software Costs

Another expense that many small business owners grit their teeth and pay for is the cost of the newest technology; after all, it’s important to always have access to the latest software, whether it be QuickBooks or other programs. Hiring an accounting service for your small business will save you from expensive yearly updates; they will always have access to the latest technology.

4. You’ll Free Up Time for Other Projects

The old saying, “time is money,” is an absolute truth – any time you spend trying to figure out your finances is time you can’t spend doing other crucial tasks. If you’re constantly poring over QuickBooks trying to keep track of every dime that comes in and out, you will have a lot less time to handle the other daily aspects of running a business. By outsourcing, you’ll have a lot more time to do those important jobs.

5. You’ll Reduce the Risk of Financial Problems

There are a lot of potential financial problems that can plague a small company. Everything from tax audits to theft can severely impact your bottom line. By having a team of professional accountants keeping track of your money, you will rest easy with the knowledge that your finances are being handled by an impartial group who won’t allow anything to get by them – or you.

6. You’ll Be Able to Make Better Financial Decisions

With a professional team of accountants handling your money, you’ll have access to whatever financial information you need at any time. You will never be unclear on exactly where your business is in terms of income and expenses, allowing you to be better informed when it comes to staffing, equipment purchases, and other major decisions for your company.

7. You Can Change with the Times

Accounting, like anything else, changes with the times and by hiring an accounting firm, you’ll be able to stay up to date. If you have an in house accountant, or handle your finances yourself, you will likely be stuck with the information you had when you were originally trained. By outsourcing, you’ll be able to always have the latest in information, technology, and fraud prevention techniques.

8. Outsourcing Even Helps the Environment

For many businesses, going green is another great benefit of outsourcing your accounting firm. Hiring a professional accounting firm will save you a lot of money on disposables such as paper, printer ink, and other sundry costs. It will also reduce your carbon footprint and benefit the environment.

9. You’ll Be Able to Grow Your Business

By outsourcing to an accounting company for your small business, you’ll be able to upgrade easily once your income increases. Many business owners find themselves defeated by their own success, as your business becoming more popular and busy can leave you and your employees overwhelmed. With an accounting firm, you’ll be able to meticulously track the growth of your business, and adapt as needed. Best of luck in your business ventures!

Cut Costs With A Business Accountant

Small business owner filing 1040 tax paperwork with money saved lining the side

Going into business for yourself can be a lucrative and rewarding venture. However, as anyone who has run a small business knows, it can also be costly. Running a small business comes with a wide array of expenses, not the least of which come from managing the finances. While you may believe that you can save by handling the money yourself, what this will really end up doing is taking up a large amount of your time that could be better spent handling other aspects of your business operations. The more time you spend trying to handle your company’s finances, the less time you can spend on other things; your time is valuable, and you’re trying to cut costs!

Once you are close to having your business up and running, it’s time to consider hiring a small business accountant. Many business owners balk at this idea, due to the fact that hiring an accountant seems like a costly step that they can avoid. However, if you take a step back and look at the grand scheme of things, you’ll find that securing the services of a small business accountant can actually save you quite a bit.
Here are a few ways you’ll save your business money by hiring an accountant:

When Starting The Business

A small business accountant can start saving you money right from the very beginning. One thing you’ll need to consider is your business structure. Will your business be best served by filing for sole proprietorship? Or are you looking for a partnership, or even to start a corporation? Choosing the right business structure for your particular line of work can be critical to saving money in the long run, and a qualified accountant can help you with this.

Once your business gets going, you will of course need to start a business bank account. As with choosing a business structure, you’ll have several options to choose from and your company’s financial future could be at stake. A credible, experienced accountant can give you a lot of help in this area.

Once Your Business Is Up and Running

After your small business accountant has helped you get your business up and running, it’s time to start thinking about managing the day to day finances. Choosing the right finance software can save you a lot of headaches when it comes to keeping track of your income and expenses; this is another thing your accountant can help you with. They can also help train you how to file taxes properly; for example, if your business makes use of independent contractors (as opposed to full on employees), they will need to be classified as such with the IRS. Having a qualified small business accountant can make tax season much less of a nightmare, and help you save money on unnecessary tax expenditures!

As Your Business Grows

Eventually, when all of your hard work pays off and your business begins to grow, you will still find yourself saving money with the help of a small business accountant. If your goal is to reach a certain amount of growth for the year, you will need to budget for that and your accountant will be there to help you create that budget. As your business grows, your costs will go up as you find yourself needing to hire more employees and buy or lease more equipment. Once again, a qualified accountant can be invaluable during this process, helping you to avoid spending any money that you don’t need to.

Hiring an Accountant

With all of the benefits that come along with hiring a small business accountant, now is a great time to start looking for one! Choosing the right accountant, however, can be the true challenge. You will want to vet any potential candidates carefully, making sure they have plenty of experience and all of the proper certifications for your area. Don’t forget to ask for references; you will want to speak to other small business owners who have successfully made use of your potential accountant’s services. Good luck with your future business endeavors!

Why Do I Need A CPA For My Small Business?

Business owner distracted from work with tax forms

As a small business owner, there is a lot you have to take into consideration. The day to day running of your business requires a lot of planning, from licensing and permits to leasing your location and registering all of your company trademarks. Needless to say, a huge part of running any business is the financial aspect, and many business owners find themselves asking the question, “Do I need a CPA for my small business?” Hiring an accountant might seem like something only bigger businesses do, but it’s something you should seriously consider no matter where you are in the growth of your company. Here are a few reasons why:

You Will Save Money

Of course, hiring a CPA isn’t cheap; it can be one of the bigger expenses you incur when you go into business. Even so, securing the services of a good accountant will ultimately pay for itself. First, consider how much time you will spend poring over the finances for your business. Every minute you spend trying to balance your books is a minute that you can no longer devote to other crucial aspects of running a business. If you’re spending hours each day working on tax forms, you aren’t bringing money in. Not only that, you can rest easy knowing that you have a financial expert working to save your company as much money as possible. Even if you yourself are financially savvy, you might find yourself spread too thin as a result of taking on every other job a business owner must deal with.

A CPA Can Help You Deal With The Unexpected

Running a business always come with an element of unpredictability. Especially as your business grows, you may find yourself dealing with problems you never considered. As your business grows, and you hire more employees, contract out more work, order more equipment, and generate more income, a talented accountant will help you to get it all under control. They will also help you deal with any unexpected financial curve balls that may come your way and threaten your business.

An Accountant Will Help With The Legal Aspects

Depending on a number of factors, including your location and the type of business you are running, the laws that govern your company can vary widely. For example, the tax laws you are bound to will depend on what type of business structure you have. Will you be the sole proprietor? Or an LLC? Are you working from home? Or do you operate out of a storefront? But even if you are the sole proprietor of the business, a CPA can help you navigate the tangled web that is local business law. Ultimately, you will need the assistance of someone who is experienced in dealing with businesses of all types and sizes. They can also assist you should you face the unfortunate situation of a lawsuit being filed against your company.

When To Hire A CPA

As a CPA can charge up to several hundred dollars an hour, it’s important to be responsible when securing the services of one. Make sure to thoroughly research anyone you are considering hiring, and ensure that they have all of the proper certifications that a CPA requires. While many small business owners worry that hiring an accountant will be an expense they can’t afford, or force them to relinquish control of certain aspects of their business, the truth is that having a great CPA can increase your savings and your profits while also offering you greater freedom to manage the other aspects of running a business. With all of these considerations in mind, the answer to the question, “Do I need a CPA for my small business?” is almost always YES!

Do you need an accountant?

Now that it’s tax season, you may find yourself considering a plan of action: Do I file my taxes with software or do I should I hire an accounting professional? The demand is there for both. As this article on the benefits of accounting software vs hiring an accountant.

nt accurately points out, tax payers opting for accounting software over actual accounting professionals “has hardly put Certified Public Accountants (CPAs) and other personal tax preparers out of business.” It’s not as if accounting firms don’t use accounting software themselves. A good answer to the question is that it all depends on your financial needs.

This begs the question when is an accountant a good idea? Well, if you’re a small business owner, still in the start-up phase, deciding whether or not to do your finances yourself, take a look at the following article, Do I Need an Accountant?

The article points out that as a small business owner, you’re already a wea

rer of many hats so taking on more responsibilities as a bookkeeper/ac

countant certainly isn’t going to make things easier for you and your lack of expertis

e may wind up losing you money.

The article boils it down to the basic considerations of time, money and knowledge. If you have the time, do you have the money? Have the money? What about time? Also, do you really understand how to do basic bookkeeping? Basically, pick two. Chances are you’re not going to have all 3 going for you at once. If you do, you’re probably an accountant. The key thing about hiring an accountant regardless of the services you are hiring them for is that accountants really know how to use all of the financial tools available to them to get the best results for you.

Do you need a bookkeeper?


Finally, maybe you should look into outsourcing.

Of course, there is a solid middle ground between choosing an accountant and choosing to rely on accounting software. Hire an accountant to teach you Quickbooks. This is a service we offer at Huddleston Tax CPAs. Click this link to find out more about our Quickbooks services. We look forward to hearing from you at (425) 483-6600.





Accounting Services: When to Hire a CPA

There’s no standard rule regarding the best time to hire a CPA for your business. Rather, it more depends on when you’ll most be able to benefit from a professional accountant. If you own a small business, it’s likely that you handle nearly all the day-to-day operations on your own. But as you grow, your ability to do it all efficiently will lessen. No matter what stage of your business’ development you find yourself in, it may be prudent to ask yourself these questions:

How comfortable would you feel about your records if your were audited?

If the thought of the IRS paying you a visit gives you a miniature heart attack, you may be able to find some comfort in hiring a CPA. First of all, compliant bookkeeping will reduce your chances of being audited and having an accountable professional will help you retrace your footsteps in a worst case scenario.

Are you spending too much time with bookkeeping?

Businesses grow when the principles are out there interfacing with customers, developing products and improving the core competencies. If all of your time is consumed with paperwork, payroll and bookkeeping, then it might be a good idea to hire someone else to handle this relatively mundane aspect of the business.

Are you losing money and you don’t know why?

Having a clear financial picture of your company is key to improving your business. An accountant can give you an accurate snapshot of your cashflow and areas that need attention so you know where to focus your energies.

Are you thinking of restructuring?

Being a sole proprietor works for some businesses, but as you grow, you might want to think about incorporating. Choosing the right structure for your business can save you lots of time and money. A CPA can advise you on what’s best for you.

The bottom-line is that you should hire a CPA if you aren’t completely confident and comfortable with the numbers side of your business. This is a reality for many small business owners, since most entrepreneurs get into the business by following their innovation or passion and give little thought to bookkeeping. But accounting practices can make or break a business, no matter how ingenious your product is.

John Huddleston
Seattle CPA  

Certified Public Accountants: Questions to Ask Before Hiring a CPA

Certified Public Accountant (CPA) designation signifies that your accountant has undergone specialized training and passed rigorous education and examination requirements. Even so, not all CPAs are equal. When choosing a CPA, be sure to look beyond the acronyms and find out about his or her education, experience, expertise, and whether or not they meet your needs. To help you make this judgment call, begin by asking these five questions:

1. Have you met all the requirements to be considered a Certified Public Accountant in my state?

The first step when vetting a CPA is to determine whether or not they are a genuine CPA in your state. You can actually answer this question on your own via your state’s professional licenses website. You can find a list of CPA institutions by state at Make sure your CPA is up to date with their requirements and are not suspended or inactive.

2. How many years experience have you had as a CPA?

The road to becoming a CPA is marked by years of education and training, so even a freshly minted CPA won’t be completely inexperienced. But it’s still best to choose a CPA who has considerable hands-on experience as a practicing CPA.

3. What is your financial expertise in?

There are a number of CPA specializations, including Assurance and Attestation, Corporate Financing, Corporate Governance, Estate Planning, Financial Accounting, Financial Analysis, Financial Planning, Forensic Accounting, Income Tax, Information Technology in accounting and auditing, Management Consulting, Performance Consulting, Tax Preparation and Planning, or Venture Capitalism. Make sure your CPA is well-versed in the area where you need the most help.

4. I need (state the requirements of your business) and I’m wondering if you have the necessary knowledge and experience to help me with this type of accounting?

Chances are, you know what part of your tax return is the most complicated and potentially problematic. Be up front about this issue and make sure they can address it with confidence.

5. What are your hours and availability? What kind of contingency is there if I am audited?

Lastly, you’ll want to make sure that your CPA firm will be there for you when you need them. Make sure they can meet with you when you are available (i.e. do they only operate during business hours when you are also at work? Are lunch meeting feasible?). You’ll also want to be sure that they’ll be accountable (no pun intended) in the case that you are audited. Otherwise, you’ll have to reverse engineer their work in order to answer all of the IRS’ questions.

These five questions should just get you started. Choose your CPA carefully and ensure that you feel comfortable and confident in their experience and expertise.

John Huddleston
Seattle CPA

CPA Checklist: What to Bring to your First Meeting

A Certified Public Accountant (CPA) typically bases their rates at least partially on an hourly basis. Because of this, it’s in your best interest to be organized and efficient with your paperwork so they don’t have to spend a lot of time requesting pertinent documents and information from you. To help speed along the process and save yourself some money, make sure your bring all of the following to your first meeting with your CPA.A completed tax organizer – This is a form that has all your necessary basic information for your account. Some CPAs will have their own form for you to fill out. Otherwise, you can find basic tax organizers online.

Last Year’s Tax Return – This is essential for new clients. Always keep your returns on file so your tax preparer has a good starting point.

Form W-2 – Ask your employer for this if you haven’t received it yet.

Form 1099 – You’ll receive this from your banks and investment accounts or from anyone who’s retained you as an independent contractor.

Form 1098 – If you own a home or property, your mortgage company will forward you this information.

Brokerage statements – Bring these in for each of your stock, bond or investment accounts for the year.

Closing statements – If you bought, sold or refinanced real estate in the tax year, bring your closing documents.

Any notices from the IRS or other taxing authorities – If you received any letters about your taxes or tax situation from your city, county, state or the IRS, bring these with.

Schedule K-1 – This form is for income or loss form S-corporations, partnerships and other legal entities.

State specific forms – Some states require additional forms or documentations for exemptions and deductions. For example, Seattle and Bellevue businesses have to pay Business & Occupation (B&O) taxes according to Washington State tax law.

Aside from these documents, you’ll want to bring in any other supporting documents. That includes schedules, checkbooks, receipts for charitable donations and business purchases, information regarding deductible expenses and any documents relating to self-employment income or other miscellaneous income.

Being organized when it comes to working with a CPA pays off in many ways. You’ll save time and you’ll ensure that your tax return is filed in a correct and timely fashion, which decreases your chances of paying penalties or being audited. Ask your CPA what you should bring to your first meeting and get started off on the right foot.
John Huddleston
Seattle CPA

Tax Preparer Red Flags: Telltale Signs of Tax Accountants You Should Avoid

With the proliferation of tax preparation storefronts that are here today and gone tomorrow, the prevalence of tax return scams or unscrupulous tax filing practices is on the rise. While the government is attempting to buckle down on tax scammers, it’s incumbent upon you to sort out the bad apples from the reputable tax professionals. To help you spot the phonies, take note of these warning signs:

The tax preparer won’t sign your return.

There’s a designated area on your tax return for your preparer to sign. No matter what, you will be responsible to pay fees and penalties if there are mistakes, so there’s no reason a tax prepare should refuse to sign the return. By doing so, they put their stamp of approval on it. By refusing to do so, it’s clear that they have something to hide.

The tax preparer promises you a specific amount on your return.

If someone says they can guarantee you X amount of dollars on your return, they are blowing smoke. No one can know for sure how much you will receive until they’ve done all of your paperwork.

The tax professional bases the fee on the amount of your refund.

This is also suspect, since it may motivate the tax preparer to artificially inflate your return amount. Tax professionals should charge according to the complexity of your return, not on how much you receive from the IRS.

The tax accounting firm doesn’t have a history.

The IRS may initiate an audit up to 7 years after you file your return. If that happens, you’re going to want to talk to your tax preparer – make sure they’ll still be in business if you have questions. Watch out for accounting firms that set up temporary store fronts or just suddenly appeared right around tax time. One last bit of advice: You may be better off choosing a CPA. Aside from being the best fit for complex tax situations, you can easily verify a CPA’s license online. For example, you can check the status of a Bellevue or Seattle CPA’s license at the Washington State Board of Accountancy website with just a few clicks. It’s illegal to call yourself a CPA if you aren’t one, and if they don’t show up in your state’s database, that’s a deal breaker.

John Huddleston
Seattle CPA





Certified Public Accountants: Tips for Saving Money with your CPA

The services of a CPA are invaluable. Not only can they get you bigger tax returns and save you time and hassle, but they can also keep you out of hot water with the IRS and the state tax department. Many tax filers see CPA fees as an investment, since in the end, a CPAs services may pay for themselves. Nevertheless, you can get even more from your relationship with a CPA by being prepared and being a good client. Follow these money saving tips when hiring a CPA.Come Prepared

CPAs often based their fees on an hourly rate and a “hassle factor.” If you show up to your first meeting with a box full of loose papers and no idea how much you even made that year, it’s going to take considerable time and effort to even get to the beginning. You can save you and your CPA hours of hassle by getting your records in order before you meet, which translates into a lower overall cost for his or her services.

Get in Touch Early

Things get crazy for tax professionals come March and April. Of course, all CPAs will do their due diligence with every return, but if you want extra attention and a less harried pace, don’t get in touch right in the middle of crunch time. Instead, pick up the phone around mid-February so nobody feels rushed.

Rush Accounts Aren’t Ideal

You may think that CPAs prefer doing rush jobs because they get to tack on a premium for getting the job done quick. But in reality, most CPAs would rather take their time with your account to make sure everything is in order and may even refer you to another accountant rather than taking you on last minute.

Don’t Hesitate to Get an Extension

Instead of paying the rush fee, you might be better off filing an extension. Contrary to popular belief, filing an extension doesn’t necessarily flag you for an audit. In fact, by taking more time to go over your records and make sure everything is in order, you actually decrease your chances of getting audited.

As with any professional, being a good client means you get better value from the relationship. Follow these tips and you’ll pay less in fees and get more benefits from your CPA.

John Huddleston Seattle CPA