The Importance of Hiring Experts in the Food Service Industry for Your Business
As you might imagine, doing taxes for your restaurant or bar and doing them for yourself are completely different operations. On your personal tax return, you provide your various income streams, factor in the taxes you’ve already paid, calculate any deductions, and then see whether you’re getting money back from the IRS or you have to pay more. And that process is difficult enough for many people that they hire a professional to prepare their income tax.
The tax return for your business is more complex by several degrees, as you have to account for labor, taxes, investments, inventory, tips, capital, and more. So why do so many restaurant owners feel they can do their taxes on their own as if they’re filing their personal W-2 online via TurboTax?
Think of it this way: people come to your establishment to dine on food on beverages created by expert chefs, so it’s time you hired expert bookkeepers and accountants to help prepare your income tax return.
If you’re still unsure about the need to invest in professional help for your income taxes, we hope these three proof points will change your mind.
#1 You Must Keep Everything
Yes, we mean absolutely everything. You must account for forms like:
- Sales reports
- Cash flow
And that’s just for starters! To complete a thorough tax return that won’t alert the IRS to conduct an audit, you have to present all the financial dealings of your restaurant or bar from the entire year. Not tracking your documents is the biggest mistake a restaurateur can make, even if they’ve contracted with a professional accountant.
Set yourself up for success by creating clear processes for how, when, and where you’ll keep everything for tax season. Better yet, invest in a software and service that helps your restaurant streamline your documentation processes well in advance of tax season.
#2 Tracking Your Deductions is Time-Consuming, but Essential
Let’s be clear – step #2 can’t be truly effective unless you’ve followed step #1 to the letter. The list of what you can deduct on your taxes is long, detailed, and complicated, and you need all the information about your expenses and income. Why? Because keeping track of them absolutely crucial to the success of your tax return and business. It includes big-ticket items like:
- Costs of Good Sold
- Marketing and Advertising
- Employee Payroll Taxes
- Contractors, Repairs, and Maintenance
- Banking Fees
And that’s just a fraction of the expenses you can count! Sure, you could keep a list of deduction handy for when tax time comes, but it would make more sense to partner with a bookkeeping expert in the food service industry who knows this stuff inside and out.
Besides, wouldn’t you rather spend your time perfecting your menu and increasing the quality of customer service from your staff than attempting to be your own CPA?
#3 Sales Tax Compliance is Your Salvation
Even if you execute steps #1 and 2 effectively, you will still be in trouble if your sales tax income and payments are out of whack. Because once you fall out of compliance with your sales taxes, the path back to compliance can be long and costly.
You need your Point-of-Sale system to be aligned and audited to ensure your restaurant or bar collects and reports sales taxes correctly. The best way to ensure sales tax compliance all year long is to work with experts in the food service industry who can prepare your systems for maximum accuracy.
Ready to get your taxes prepared bookkeeping professionals who work exclusively with restaurants and bars? Tabulate will make sure your balance sheet is accurate, your taxes are correct, and your documentation is on-point. We’ll deliver clean books to your CPA so your tax return will be precise and on time.
And if you sign up with Tabulate before 03/01/2019, we’ll even prepare your 2018 income tax return for free. Contact us today!