Every marketing agency needs a tax strategy and now is a great time to put one together. Your tax strategy sets the financial stage for the upcoming three to five years. This forecasts your business revenue and projected expenditures. As a result, you can better plan the best practices for the smart growth of your business.
Without a tax strategy, you may end up belly up after just the first year of profits and losses. Start with these tips on building a successful tax strategy for your marketing agency.
Why Build a Tax Strategy?
A tax strategy for a marketing agency looks at your business’s total income and is a plan for improving it. It is the best tax management practice for stretching your money and can even give you an extra edge in saving money. One of the primary benefits of a solid strategy is that it leads to a stronger cash flow.
Overall, a tax strategy functions as a guide for handling your taxes and serves as a point of reference when making decisions that may affect the financial state of your business.
What to Include in Your Tax Strategy
Sure, but what should be included in your tax strategy in order for it to be a benefit for your business–and not a burden?
Your tax strategy should be built with your money-saving and cash flow-improving goals in mind.
It begins with a cash flow plan and includes any tax deductions (for which you want to save up business receipts).
Once your saving and profit goals are in place, you can shift your attention to crafting a tax strategy that helps you achieve those goals.
Some of the most important aspects in a strong tax strategy include:
Cash Flow Plan
Improving cash flow will likely be one of your goals, at least it is for most businesses. It’s incredibly important and ties into your strategy because:
- You’ll save money with a proper plan.
- Knowing when money is coming in and out will help you estimate when/how much you’ll need to pay in taxes.
- You can make purchases or account for payments to coincide with when and how you plan to pay your taxes.
You won’t want to leave this aspect out of your tax strategy considering your cash flow plan will work with your tax plan and vice versa.
Deductions
There’s a good chance you qualify for tax deductions and you may be taking advantage of some of them but you may also be unaware of deductions that could greatly impact your business.
Make sure you have a plan to claim these and meet the requirements. As you look for deductions you may qualify for that aren’t currently, figure out what new strategies, purchases, improvements, or systems you need to put into place to make them work.
These are great money-savers and can be of significant value, take advantage of them if you have the opportunity.
Timely Income Collection
Timely income collection should be a top priority when laying out a tax strategy. You can defer or accelerate payments based on your needs.
For example, let’s say you want to lower your tax payment for this year. Defer some of your December invoices to January, so you don’t have to claim them on your taxes this year. This will also give you a boost in cash to start out the year.
Here is another example: you decide to set aside some extra cash to make your tax payment in the year ahead. You can accelerate some of your invoices to collect them before the year ends, that way you have a little extra cash for saving.
When it comes down to it, timely income collection is all about making decisions based on what’s best for you and your business.
Calendar of Due Dates
Creating a calendar of due dates seems simple, and maybe even like a waste of time, but is actually very helpful. With a clear schedule, you’ll know exactly what needs to be done and when. This will help you avoid missing deadlines which can result in extra fees and cost you the money you’ve worked hard to save.
Knowing due dates gives you time to prepare, alleviating the need to rush to get things done at the last minute.
If you’re not sure of important due dates or are getting sick of having to prepare your tax strategy on your own, you may want to consider working with an experienced accountant.
Need Help Building a Tax Strategy?
An experienced accountant, like Pasquesi Partners, will cover all your bases. They’ll work with you to ensure you have the best tax strategy built for your business. They know exactly what needs to be included and when things need to be done to optimize your cash flow and save you money.
Talk to an expert at Pasquesi Partners today for a discovery call.