Small business owners are not as tax savvy as they think they are, according to a new survey from Clutch, the leading B2B research, ratings, and reviews company. Thirty percent (30%) of small businesses believe they overpay their taxes and could claim more deductions and credits. This is despite the fact that 93% of small businesses rate themselves as 'very or 'somewhat confident' in their ability to accurately file taxes.
Clutch surveyed small business owners and managers who are involved in their businesses' financial decisions to determine how they manage their finances and where they fall short.
Small businesses can benefit from seeking outside help for their taxes, even if they think it isn't worth the cost, accounting experts said.
"It pays to have an actual tax accountant that knows the latest rules, the financial packages, and who has software that is up-to-date with the IRS," said Wanda Medina, managing partner at Maventri, a full-service digital firm providing accounting, marketing, and administrative support services. "In the long run, it's going to save a lot of money versus small businesses trying to do it on their own."
Small businesses also
can benefit from seeking help with other financial processes.
Ninety-five percent (95%) of small business owners and managers say they
are 'confident' or 'very confident' in the accuracy of their overall
financial records, but experts said that these same small businesses
often don't recognize when they make mistakes.
Because of this, tax services have an opportunity to make even more money thanks to their clients. Many businesses can benefit from financial services and, according to AudienceSCAN, 22.7% of Tax Service Clients intend to pay for such services this year. About 28% of this audience took action after seeing in-store signage and, in the past year, 44.1% reacted to internet banner ads. Tax service providers can join with financial advisors in creating blog posts. At least 14.5% of Tax Service Clients respond to this form of content marketing.
"[Small business owners] can think that they're fine. Then, they have someone skilled look at their balance sheet, their profit and loss, and say, 'Hey, this is missing, or this isn't categorized correctly,'" Medina said.
Small Businesses Should Keep Separate Bank Accounts
At least one-quarter of small businesses (27%) do not keep their personal and business finances in separate bank accounts. While this works for some businesses, it's typically not recommended and potentially is risky, experts said.
"We recommend if you have a small business, I don't care how small, you should create a separate bank account," said Rhett Molitor, co-founder of Basis 365 Accounting, a cloud-based accounting service.
Separating bank accounts decreases the likelihood of errors. This separation benefits the nearly one-quarter of small businesses (23%) that have experienced challenges with mixing business and personal finances in the past year.
Tax service providers can advertise their services to Tax Service Clients a number of different ways. According to AudienceSCAN, this group is 15% more likely than other adults to take action after seeing ads on daily deals sites like Groupon or LivingSocial. Also, last year, 51.4% took action after receiving an email ad and 66.5% were influenced by a commercial they saw on TV.
AudienceSCAN data is available for your applications and dashboards through the SalesFuel API. Media companies and agencies can access AudienceSCAN data through the AudienceSCAN Reports in AdMall.