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Why is Annual Strategic Tax Planning Important?

Written By: MB Group

While it may be the last thing on your mind, most business owners and professionals relish the opportunity to have an effective and strategic tax plan in place. Once you have started making great sales, put proper operations in place, and seen top-line growth, it can be extremely challenging to see your cash flow reduced due to the effects of tax season. 

In this article, we will go over the top four reasons why it is important to get ahead of the crowd and to start putting infrastructure in place months before your filing is due.

Let's get started.

Setting Up a Good Action Planannual tax plan

You've set up proper systems in your business operationally, and have had success. Your teams may be in cohesion, and everyone is on the same page. Targets are clear and concise, and the overall mission is communicated. However, when it comes to taxes, there may be some confusion and fear around the office, or within management itself. 

Taxes are not unlike any other business system that is in place. It requires proper planning that goes beyond the scope of filing your financial statements. Various tax codes, allowances, write-offs, and other planning methods need to be taken into consideration. Often, it can even mean that not every expense is tracked, or the team is not on the same page about what should be included or not.

By having a great action plan for your strategic accounting and tax planning, you can be sure to instill confidence in yourself and your team that you are maximizing everyone's efforts, time and revenue generated.

What Gets Measured Gets Done

Planning and communicating with intention works wonders toward the success of your business. Businesses are much more likely to achieve their targets if they set their metrics with intention. This not only means putting the message out there to your team, but a sense of urgency and specificity needs to be added to your overall action plan. SMART goals are a popular way of doing this, for reaching goals that are 

  • Specific
  • Measurable
  • Attainable
  • Realistic
  • Timely

Although it is a well-known concept, every one of the five concepts revolves around being specific about what success looks like. This means adding intentions to your desired outcomes, such as the amount that increases on the bottom line each year, with all else remaining equal.

Tax planning should be the outline for your business, as proper financial management starts from within the team. If everyone has this goal in mind, and everyone is contributing intentionally to proper tax and accounting principles, you are more likely to achieve the goals that you detailed in the first step.

Team Cohesion

team cohesionCompounding the concept of a team mission is the team-unity factor. It is not enough to have a plan and detailed steps in place if there is no buy-in from the team or no one to champion the change and structure. 75% of team members rated that their team cohesion is a deciding factor when staying within an organization, with an additional 37% stating that it is the primary reason that they work for that particular enterprise.

Without team buy-in, projects can be difficult to communicate and get done effectively because of a lack of clarity, communication, and leadership. This is where working with a professional CPA team can come into place. Most staff will not be knowledgeable enough to champion a tax planning strategy, as most business owners will create a team that works well to generate revenue, protect it and service their customers.

A trained CPA team will be on your side, delivering the proper outline in place to empower your workers and co-workers with the knowledge and goals necessary to achieve strategic tax planning. It will also provide everyone with the peace of mind that they have professionals in their corner and the peace of mind that they require no training or upkeep within the organization.

Improved Benefits, Less Liability

Perhaps most importantly, having an iron-clad strategic plan in place is synonymous with a sigh of relief. With proper tax planning strategies, you can make sure that:

  • Everything is filed on time.
  • You are using all the resources and techniques to your advantage.
  • Your team will be on the same page.
  • Everyone will be purposeful and act with intent.
  • Less mental and tax burden when it comes to filing
  • Save more money and spend less time

Wrapping it Up

A strategic plan should be put in place for all aspects of the business, and tax planning should be no stranger to this. Many business owners may leave this on the back burner, especially if they feel it is too complicated or they have not generated "enough" revenue. Hiring a professional CPA team can help you to avoid huge common mistakes

If you're ready to take the next step and work with tax planning experts, be sure to contact the MB Group as soon as possible to get started. 

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Tags: tax planning

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