Blog | Insights
Every year I speak with CPAs who bemoan the chaos and rush to file taxes for many of their government clients. While these professionals get the job done for their clients, it often takes more time (and increased cost) with a less than ideal product. In addition to a marked reduction in stress and pressure, planning ahead does deliver real and tangible benefits for the government entities and contractors themselves. Among these? Your government clients will be much more likely to file accurate taxes (time to make sure nothing is missed), avoid fees and penalties, and have accurate revenue and profit projections for the new year, while paying lower preparation costs. The key is organization and planning – and within the government arena, this is even more important with the additional regulations and compliance considerations that are necessary at filing time.
Seems simple and straightforward, right?
Well, the fact remains that a large percentage of businesses still face late payment fees. According to a recent article from the U.S. Tax Center at www.irs.com, 5.5 million businesses nationwide file for tax extensions each year – presumably because they have not had time to get everything in order to get their return filed by the regular due date. By contrast, where we handle the accounting for clients throughout the year, over 90% are able to file their taxes on time each year through their CPA firm. This is a direct result of a systematic, ongoing, and timely approach to the year-end close.
As a government contractor, what can you do to help your federal clients appreciate and implement a proactive year-end strategy? First, take stock of their current situation. Here are some tried-and-true ways to tell if an organization has an efficient approach to their year-end close. Not surprisingly, they come down to being proactive, being timely, and minimizing unnecessary costs. Are they:
Once you’ve assessed the existing situation with regard to your government client’s year-end approach and culture, the timing is ideal to focus on educating the teams on the immense value (more than just peace of mind!) that comes with planning ahead versus scrambling to the finish. Here are just a few of the highlights:
But identifying inefficient practices and approaches is the easy part. Effectively implementing changes in organizational perspective and culture isn’t. Here are some top best practices I’ve gleaned from my own experience that can help the government organizations you serve transition smoothly to a timely year-end filing mentality:
The bottom-line is that planning and operating proactively for year-end is a best-practice approach for success. Doing so leads to many benefits, incuding timely and accurate filings, lower filing costs, the elmination of penalites and fees, and better overall business planning. Looking forward, and not just backward, is a key factor for robust growth, across the business arena but particularly in the government sector.
About the Author
Matthew McKelvey is President of The McKelvey Group (TMG) with over twenty-five years of experience in Finance/Accounting, Government Contracting, Business Valuations, Process Optimization, and Training. Matt is well known for his expertise in working with organizations as they seek to enter or grow their footprint in the Federal Government marketplace. In addition to direct client consulting in price and proposal strategies, compliance, and accounting, Matt speaks regularly and teaches courses to the Government contracting community. The subject matter of the speaking engagements and training include Price/Cost Proposal Strategies, DCAA Audit Preparation, Compliant Accounting Systems, Indirect Cost Structures, Incurred Cost Submissions, and Negotiating with the Federal Government. The McKelvey Group is a National Association of State Boards of Accountancy (NASBA) recognized Continuing Professional Education (CPE) program sponsor providing CPE credits in accordance with nationally recognized standards. Matt holds an MBA in Finance and Marketing and a BS in Finance. He is a Six Sigma Certified Black Belt, a member of the National Contract Management Association (NCMA) and the Association of Proposal Management Professionals (APMP), and is an Accredited Senior Appraiser with the American Society of Appraisers (ASA). For more information, please visit www.themckelveygroup.com.