Accounting and Tax Preparation Services for Certified Minority Owned Businesses

Minimizing the gap between funds and opportunities imparted to minority owned businesses as compared to others is quite crucial. Besides this, a lot of programs have been launched to let minority owned companies grow. The certificate bearing minority owned businesses get an access over special government programs. These programs include government contracts which will give a push to an otherwise deprived business..

What are the requirements to get qualified as a Certified Minority Owned Business?

The small-sized firms who seek to acquire minority Business Certificate are required to get in touch with the National Minority Supplier Development Council (NMSDC). NMSDC is an organization that is focused towards enhancing the prospects of business for certified minority businesses and connects them to the members of the corporate industry. For Certification, an application can be submitted online and the requirements are:

  • Business should be at least 51 percent minority-owned i.e. it should involve the one who is 25 percent- African-American, American Indian, Asian American, Alaskan Native, Hispanic or Native American.
  • This is confirmed through – screening tests and interviews along with the physical visit.
  • The Minority owner member or members must be performing management and daily operations of the firm.
  • It should be a profit making organization which is situated in U.S. or its trust territories.

What are the benefits of being a Certified Minority Owned Business?

Access to Corporate and Government Contracts:

As per the law, many government organizations are mandated to perform business with the Minority Owned Businesses. Thus, purchasing a minimum specified percentage of the goods from them is mandatory. Contrary to this, a significant number of organizations are themselves eager to initiate business with them even if these firms are not mandated to do so. These firms are well acknowledged about the advantages of buying the goods and services from the certified Minority Owned Businesses. This certificate imparts a way of differentiating a specific firm from other suppliers in competition. Besides this, these firms are also provided with the information of the businesses and government organizations who want to buy the supply needs from the certified businesses. This list thus initiates their focused approach towards the interested customers.

Funding Imparted:

As per the research if the access to debt and equity capital is measured between the Minority Owned Businesses and otherwise, Minority is the one deprived. A lot of programs are thus launched to minimize this gap in funding. To get the advantage of these programs requires one to hold the certification. If not required by the programs, this certificate elevates and legitimates the status of a business.

An exclusive pool of Equity Financing provided can structure the equity investment of a business. The firms are mandated to obtain certification to get the advantage of the same. Many equity investors are nowadays keeping a percentage of capital for investing in Certified Businesses considering the benefits to do so.

A high amount of Debt Financing is also enabled to these firms. To access these loans the firm is required to hold certification like Equity Financing. These loans thus offer the terms of lower interest rates as compared to the general interest rate imposed and more relaxed guarantee requirements. Many organizations also impart grants to provide support towards these businesses.

Training and Network Opportunities Fostered:

Through the Certification, a Minority Business is empowered via training and networking programs. These programs will prove useful for them while expanding their reach to new customers and while imparting best practices required for a successful endeavour. Along with the online courses, many conferences and events are organized which impart enhancement to the business processes and profits earned.

Tax Accounting

Accounting is the recording, interpretation and reporting of financial transactions. Each and every business must keep proper record of all such transactions. There are several branches of accounting such as financial accounting, managerial accounting and tax accounting.

Whether your business is a sole proprietorship, partnership or corporation, business men must file an income tax return and pay income taxes. Proper recording and accurate tax return will be beneficial in maintaining proper reputation of business and on the other side, poor records may result in underpaying or overpaying of taxes. It means recordkeeping will directly affect the tax return policy.

In simple we can say that Tax Accounting is important for complying with tax laws as well as for minimizing tax expenditures.

Most taxpayers dread tax season all year round and for those who understand the process, filling taxes seems a tedious task. But for others it becomes a confusing ordeal. A tax accountant plays a vital role in the formation of a business. Tax accountants are responsible for maintaining proper record. They tend to offer a broad range of services, from budget analysis and asset management to investment planning, legal consulting, cost evaluation, auditing services and many more.

Tax accounting will cover financial planning services, litigation consulting services and managerial advisory services. The tax accounting group provides a wide range of tax compliance, planning and consulting services to individuals, business firms (including partnership and corporations).

There are several income tax software programs available on the market for completion of yearly taxes. TaxACT software is available in online, download and CD-Rom form. TurboTax software offers an online or a software package for personal or small business tax preparation. The software can be downloaded or provide by CD-Rom. TaxSlayer software can be used online or downloaded. There is no charge for the web version however there is a small efile fee for federal taxes. TaxCut income tax software is developed by H & R Block, is ideal for simple returns.

How to Start a Tax Accounting and CPA Firm

Having gained considerable experience developing five of my own accounting practices and spending the next two decades individually assisting over 2000 accountants develop their own practices, there are a few basic principles accountants can observe to provide themselves the greatest opportunity for success.

The best way for accountants to succeed in starting their own Accounting and Tax CPA practice is by providing themselves with the greatest opportunity for that success. This can be done by remembering that the basic principles for a successful practice are good clients together with the basic tools to service them. Many accountants seeking to develop their own practice position themselves with large amounts of unnecessary overhead undermining their opportunity for success. Unnecessary costs can be deferred until they become necessary. Obtain only necessary items to service the initial clients. It is important to keep the initial overhead as low as possible to create a positive cash flow quickly to finance the development of the practice.

When starting an Accounting and Tax CPA Firm, it is recommended that accountants start from their home. In today’s technological world, clients are very accepting to accountants working out of their homes. In some respect, it provides the clients with the perception that they are receiving a greater value. They feel if the accountant is incurring less overhead, perhaps part of the savings is being passed on to the clients. By saving the cost of rent and other office expenses, accountants will accelerate their positive cash flow, which may be used for financing the expansion of the practice without going into debt. Once the cash flow is sufficient to support an office, then the accountant can decide if expansion into an office is warranted. Accountants who do work from home may also find they enjoy it so much that they may choose to forgo moving to an outside office.

Another way accountants can maintain a low overhead is by avoiding unnecessary costly software. Numerous accountants procure very expensive unnecessary software to support clients they have yet to develop. There are extremely good software companies that provide an excellent product at a low to medium price range. Drake Tax Software is a very cost-efficient software program that has an excellent reputation. In the September 2011 edition of The Journal of Accountancy, the results of a software survey were published, and Drake Tax Software received an excellent score. Accountants who are starting their own Accounting & Tax CPA Firm are encouraged to pursue good software at affordable prices giving them the basic tools to service clients.

There are many other simple ways accountants starting their own Tax and Accounting Firm can reduce startup costs. Simply the name that accountants decide on for their firms will reduce their initial costs. If accountants would use their first name, middle initial, and last name followed by CPA and/or Certified public Accountant, they may avoid DBA registration costs, bank charges, and filing fees. In addition, active licensed Certified Public Accountants have legal rights to practice public accounting under their own names saving them costs associated with fictitious names. Many times, Certified Public Accountants can choose fictitious names, which would diminish potential clients’ perceptions of them, which in turn would impede a start-up business. For example, a licensed Certified Public Accountant doing business as “Bay City Tax Service” or “Accounting & Tax Service” loses credibility. Prospective clients may perceive this company as uncertified and unlicensed.

Accountants who are considering developing an Accounting/CPA practice and who are currently employed are encouraged not to terminate their employment in pursuit of starting their own Accounting & Tax CPA Firm. Instead, they should develop their practice concurrently while still employed. This can be a time-demanding decision when compared to terminating their employment and devoting full time to their practice; however, the sacrifice is well worth the reward. As the practice grows, accountants can grow with it and transition themselves full-time into their own practice without placing unnecessary financial pressure on themselves or on their families.

With the relief of financial pressure while operating the new practice concurrently with employment, there will be a substantial boost in income without incurring large expenses. Cash reserves will substantially increase as employment income is maintained, and new income will begin to flow in from the new practice as well. This increase in cash reserves will be of great assistance in financing a full-time transition, and this will make the move go more smoothly when the time comes

In making that move to a full-time practice, accountants will find it easiest to transition full-time into their own practice in the month of January. January is the beginning of tax season, and along with it comes the beginning of revenue from income tax preparation. The increase in revenue will come right at the time the accountants need it the very most. It is important that accountants position themselves to begin marketing at the start of tax season to aggressively develop individual tax clients taking full advantage of their first tax season. In addition, January encompasses year-end work for many businesses, such as payroll and financial reporting. This will also add additional revenue to the accountants’ practices in the month of their transition.

January is also the best month of the year to transition full-time into the practice because it may be the best month of the year for developing new businesses as clients. Most business owners resist changing accountants. It takes a very solid reason for a client to leave a predecessor accountant. Once a client makes the decision to change, usually he or she will not invoke the change until the end of the business year not desiring to have two accountants split a fiscal year. Accordingly, year-end is the most opportune time for approaching business owners, and it will make the transition into the full-time practice easier.

Finally, when starting an Accounting and Tax CPA Firm, it is important to avoid marketing services as a commodity or product. This often leads to very low response and low quality of clientele. It also can be extremely expensive. There are volumes of accountants who pursue very expensive marketing programs offered by various companies and who are lured by difficult-to-enforce guarantees. Many of these programs are commodity driven. The accounting industry is not commodity driven; it is driven by trust and loyalty. An accountant’s marketing campaign must be driven by truth, honesty, and professionalism, which will enable a client to be more comfortable knowing that he or she is hiring an accountant who can be trusted.

Accountant or CPAs who are currently employed and seeking to start their own Accounting and Tax CPA firms will find it beneficial to pursue the practice by following some very simple steps:

1) Avoid unnecessary costs and expenses.

2) Consider starting the accounting CPA Practice from home.

3) Develop the practice alongside current employment.

4) Avoid marketing the firm as a commodity or product.

Remember, opportunity starts with action. No action, no opportunity. Accountants who take action provide themselves with the opportunity to succeed. They should start their own CPA and Accounting Firms from home while employed. Their successful experience without jeopardizing their future will provide them the confidence and cash flow they need to enjoy the freedoms in ownership of an Accounting and Tax CPA Firm.