A company cannot rely on her employees only to perform all the tasks in the company. Some services should be outsourced to the management. The shareholders employ the management. There exists an agency agreement between the administration and the shareholders. In the agreement, the management is expected to act on behalf of the shareholders to maximize the productivity of the company.
One of the strategies that prominent companies employ is to outsource some services that are best handled by an external firm and instruct the employees of the company to concentrate the daily and routine tasks of the corporations. One of the services that can be outsourced is taxation services from https://honesttax.com. services offered by a tax consultant company are?
Tax avoidance is reducing a company tax liabilities by the legal means. It is taking advantage of the niches and incentives given by the government to reduce that tax liability legally. Who can a company reduce its tax liability? There are some ways that a company can reduce the amount of tax that should be paid. A tax company comes to design and implement a tax policy.
First, the company can contribute to a charitable organization. Donations to a charitable organization are not taxed. The company can take advantage of this and contribute to such schemes. Secondly, the company can finance some of her operation using debt capital. Income arising from equity capital is taxed. Loan interests are not taxed. A company can take advantage of this and finance some of its operation from debt capital. The tax consultants should develop a borrowing plan that maximizes this benefits.
An audit function is an accounting function that seeks to form an option whether the value of the balance sheet and the operation statement reflects the accurate and fair value of the company. It is the responsibility of the management to prepare financial statements of the company. Financial statements are prepared on a daily basis. They should be open for every shareholder to inspect. The administration should be honest in preparing this statements.
However, in case of management colludes with the bookkeepers to change the figures of the financial statements, no one can notice such a mistake. The audit function comes as a solution to this. The audit function checks the balances and the figure of the financial statements and forms an option that whatever the reports say about the company, it reflects the true and fair value of the company.
Bookkeeping services and filling
Bookkeeping is a sole function of the management. The books of accounts should be recorded and maintained by the management. However, the management is free to outsource the service whenever they feel like. Why should the administration outsource the bookkeeping services? The management could outsource the bookkeeping exercise if it were cheaper than hiring permanent staffs. The management can also outsource if the volume of transactions are large and therefore requires a large professional organization to record and keep the books.