CONSTRUCTION Accounting ARTICLE -
Contractor Eases into the Benefits of E-Filing
Target Audience: Construction Industry Professionals, General Contractors, Construction Accountants
The owner of a midsize fence-building company met with his financial advisor to discuss upgrades to the contractor’s accounting system. In particular, he wanted to discuss a recently passed state law that required taxpayers to file forms, as well as pay taxes and fees, electronically. The contractor was used to filling out paper forms and mailing in payments, so he was a little worried about the transition to a paperless method.
It was a concern the advisor had heard before. More governments had begun mandating e-filing as they looked to slash their administrative costs, the advisor explained, and the trend was poised to grow further. Businesses that didn’t switch from paper to electronic filing could face fines, and some governments would consider a tax form missing until they received it in the correct format.
Fully functional
Because the contractor was already using construction-specific accounting and payroll software, the advisor recommended that he invest in an e-filing application that he could integrate into his existing system.
By doing so, the contractor could direct the e-filing program to pull information already in his accounting and payroll records and fill out many portions of the forms automatically. The system would debit the contractor’s bank account to cover needed payments, and the contractor could receive refunds electronically.
The e-filing application would keep track of the contractor’s local, state and federal government filing requirements, including income taxes, payroll taxes and new hire forms, the advisor said. It would remind the contractor when deadlines and payment due dates were coming up and even calculate the payments. During income tax season, the advisor could work with the contractor’s system to e-file the needed documents.
Additional advantages
Along with streamlining his tax filings, the advisor continued, e-filing offered additional advantages. An effective e-filing system would save the contractor time and money spent filling out and mailing forms manually — and increase his filings’ accuracy.
Plus, the e-filing service would safeguard against data entry errors by pointing out fields with missing information or data that didn’t match the contractor’s accounting records. And, by storing forms electronically instead of in a filing cabinet, the contractor also would eliminate the risk of lost, damaged or destroyed forms — and the resulting headaches in the event of an audit.
The paperless plunge
After researching various e-filing software products, the contractor chose an application compatible with his accounting software and took the paperless plunge. Although there was obviously an upfront cost and a notable learning curve, it didn’t take long before he began to see the benefits his advisor had mentioned coming to fruition.
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