Top accounting issues in 2023

accounting tax for technology companies

However, the IRS closely reviews worker classifications (such as employee vs. independent contractor), and businesses need to review their independent contractor agreements to ensure their workers are properly classified. It is important that independent contractors not be treated as employees in regard to payroll taxes and benefits. Historically, software businesses required physical presence in a state to have sales tax nexus. Supreme Court’s decision in accounting for technology companies South Dakota v. Wayfair set a new precedent for economic nexus that no longer requires physical presence. The Wayfair decision will have a far-reaching impact on technology businesses, as states will be able to assert economic nexus over the industry; some states already have economic nexus sales tax provisions in place. If the company’s exit strategy is a sale, business structure can significantly affect the net-of-tax cash proceeds the seller receives.

  • While the landscape of technologies is growing more complex, technology is also rapidly becoming more accessible.
  • Not knowing their tax exposures before the sale could lead to surprises during the diligence process, potentially causing delays or, at worst, undoing the entire transaction.
  • Accounting software can help you keep up-to-date records, which improves the accuracy of your cash flow and allows you to see when exactly you’ll need to raise funds and find further investment for your tech startup.
  • You also need proper policies to ensure a happy, productive workplace that’s compliant with HR laws and regulations.
  • In recent years, fintech has attracted more customers and increased interest from financial services companies looking to engage in M&A activity.

We can help you in whatever way fits your company best—in-house solutions, cloud-based accounting software, payroll options, QuickBooks consulting, even entirely outsourced accounting services. Regardless of what your needs are, James Moore can provide a customized accounting solution that suits your needs. James Moore has worked with technology clients in all phases, from startup status to larger, established firms.

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That’s why it is no surprise that the AICPA’s most recent “Top Firm Issues Survey” found that “keeping up with changes and complexity of tax laws” is among the top issues for firms large and small. To illustrate the kind of enhancements produced, she used AirBnB’s website where “Adept” – the name of Wattenberger’s startup company –processed the text and images and restructured them to produce an entirely different experience of the website. Wattenberger believes this technology will be the future of a more advanced, interactive role on the web. “There’s this interesting move toward personalizing, customizing, democratizing websites and interfaces,” she said. At Marcum, we combine the resources and technology to deliver the best of both worlds for our clients and employees.

BDO has the knowledge and experience to help fintechs of different sizes and growth stages chart the way forward in any market environment and aid in the development of transformative strategies. We work with companies as they grow, leveraging our fintech accounting, tax and advisory services capabilities to support fintech companies in an on-demand future. Accounting technology helps accountants analyze data, surface valuable insights, stay current on the latest tax laws, and proactively provide guidance and support to clients.

Let’s talk about your technology industry accounting challenges.

Economic volatility, geopolitical tensions, tax and regulatory uncertainty and unforeseen supply chain issues are just a few of the disruptive dynamics reshaping the landscape. As complexities increase, innovation alone won’t be enough to capitalize on growth. With demand surging and evolving, there are limitless opportunities to harness your potential and grow. Throughout my accounting career, the manual data processes, redundancies and challenges of maintaining visibility across engagements became a real issue to solve and took time away from innovation.

Prior to seeking buyers and entering into a due diligence process, a seller should also consider which tax benefits each side would receive from the transaction and determine whether tax risks have been property evaluated. The evolution of a technology company often progresses to a transition point—purchase by an outside party, merger with another firm, or perhaps an initial public offering. We met with company officials on many occasions to formalize company policies and procedures, compile and calculate cash flow projections, and advise management on other significant questions from interested parties.

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