Business taxes are usually paid quarterly, and failure to pay these taxes may result in large penalties and could make your business a target for auditing. It is especially important that businesses with employees stay on top of their payroll taxes because the employee is dependent on the company’s accountant to figure their paychecks and withhold the proper amount of taxes from their pay. Many accounting nightmares have occurred for both businesses and employees when payroll taxes are not properly withheld and paid.
Not paying the company’s bills on time can damage your company’s reputation, even if you have plenty of income to pay the bills. It is very important that each company has a system in place for receiving bills and paying them before their due dates. The company should have an accountant that enters bills into an electronic system that keeps track of when the bills are due and the amount owed. Bills should be marked paid and filed neatly so that there is no question whether or not the bill was paid and the accountant can easily prove that the payment was made. The expenses should also be placed in categories so that expenses can easily be entered as deductions on tax forms each quarter or year.
It is equally important that accountants keep track of all monies that are owed to the business and ensure that the business collects the full amount of money they are owed. Many accounting nightmares have occurred because employees have failed to properly track the money that the business is owed and had no way to prove the debts. Good communication between people who handle accounts payable and accounts receivable for each company is essential to ensure that every item is properly entered into the computer system and filed efficiently.
The best way to avoid accounting nightmares is careful planning. It is essential that each company start a filing and accounting system as soon as it is founded so that paperwork doesn’t fall through the cracks and nightmares don’t have a chance to start. Most businesses either choose a computerized accounting program to handle their income, expenses, payroll, taxes, and other accounting needs or decide to outsource their business accounting to a local firm that can handle all of the paperwork and file reports and forms as needed. These are both great options for handling business finances.
Communication is key to streamlining business accounting and other paperwork and avoiding the hassles and nightmares that come from poor planning and shoddy accounting practices. Whether a business owner chooses an accounting firm or computer software, they should always keep an eye on the finances and make sure that they are aware of every dollar that comes in or goes out of their business.
John Smith is a now retired CMA with twenty years experience in the Canadian financial industry. John has moved into the human resources function, and now helps accountants find work, as well as helping businesses screen candidates. There is plenty of additional information on the qualities of top accountants, and there are services like accountingresume.ca that can assist in getting hired in this competitive industry.
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