Tax Compliance For Small Businesses: A Complete Guide

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StrategyDriven Managing Your Finances Article | Tax Compliance For Small Businesses: A Complete GuideAs a small business owner, filing taxes for the business can be stressful. One of the things you might notice is that the types of taxes you’ll be filing for the business are different from personal taxes and a little bit more complex. The taxes you’re required to file for your business will depend on the tax laws in your country or region. For instance, you’ll be expected to file income tax, estimated quarterly taxes, and self-employment taxes in some countries.

Additionally, you should hire a professional to guide and help you file taxes for your small business. A professional will also help you understand the kind of taxes you’ll be filing and their implications on your business. Furthermore, failure to file and pay taxes on time can be severely detrimental to your business because you’ll be fined and subject to interest on the amount due. If you have no idea where to start with filing taxes for your small business, here is a complete guide:

1. Understand Your Tax Obligations

As mentioned earlier, there are several types of taxes, and you must understand the ones your business needs to comply with. If you know the tax system well, evaluate and organize all your tax obligations to ascertain you’ll get dividends, if there are any. You’ll also have to ensure you’re up-to-date with changes in tax regulations to ensure compliance.

However, suppose you find the tax system complicated, you can hire a reputable accountant or a tax filing company such as Swyft filings registered agent service to handle the entire process.

Subsequently, you can start by looking into the basic tax forms, which differ depending on the business bracket. When filling out the tax forms, you can decide to consolidate both the business and personal obligations, especially in income tax returns. Another item you might want to consider is creating estimated tax returns where you can specify the amount and the deadline for payments.

In addition, you can check and inquire whether your business has extensions that should be handled within the prescribed time. You can request an extension for the business when there’s a need for extra time to meet legal obligations. Despite being granted an extension, you’ll have to calculate the amount owed in taxes and ascertain it’s paid before the due date.

2. Create A Personalized Tax Calendar

Keeping track of all your business tax obligations can take a toll on you, and an electronic calendar would be helpful. Start by creating a digital calendar detailing the taxes that must be filed, the amount, and deadlines. Another benefit of creating a digital calendar is that it’ll also serve as a reminder. You can also include notes on tax reports and hardcopy documents on the calendar.

Besides, you should ensure you’re using a secure application or software for the calendar. Since you’ll note important business information on the digital calendar, you must ensure it’s safe. Any form of illegal access or breach into the digital calendar can expose crucial business details. Nonetheless, a tax calendar will help you stay organized and have a one-stop shop for all business information.

StrategyDriven Managing Your Finances Article | Tax Compliance For Small Businesses: A Complete Guide3. Consider Tax Deductions

As a business owner, it’s essential to constantly look for ways to save money and boost profits. While it might sound odd, you can save money on tax deductions offered to small businesses. Some of the deductions that might be available to you are business expenses such as payment of salaries, insurance, and start-up expenses. Another area you might consider when claiming a business deduction is a home office deduction if you’re running the business from home.

In addition, you must learn what the laws on tax deductions provide and how they’ll benefit your business. For illustration, regulations such as the Qualified Business Income Tax Deduction give room for up to 20% deductions on the total income of a business. Though you’re entitled to tax deductions for your business, you must be qualified. You can check the tax regulatory bodies for qualifications for tax deductions in small businesses.

Moreover, if you’re wondering what deductions you can claim for your business, start by checking tax regulations. However, if you’ve sought the services of an accountant or a tax agent, they can advise on the tax deductions you can claim.

4. Ensure Accurate Calculation Of Taxes

Your small business must always file accurate taxes. Once you’ve collected all the information on the types of taxes, you’ll be filing and the possible deductions, you can start calculating taxes. When calculating taxes, ensure you comply with the legal structure to avoid issues with the tax regulatory body. In addition, use receipts and invoices to correctly identify income and expenditure in the business.

Once you’ve tallied the total revenue and expenses, you can determine the deductions your business qualifies for. The calculations will help determine how much tax your small business should pay. When done, file the tax forms with the tax regulatory body accompanied by payments of the amounts due. Nevertheless, if the math becomes overwhelming, seek the help of a professional.

5. Make All The Tax Documentation Accessible

Once you’ve gathered all your documents, including receipts, ensure they’re accessible to authorized personnel. The papers are proof of tax compliance and should be accessible to your business partners or anyone else that might need them. While it’s easy to keep a digital record of all documents, hardcopy documents can be saved as a backup. You can keep the documents in a lockable drawer for safety.

Besides, if there’s an issue with the tax process, the documents can be used to countercheck accounting details. Further, you can label the documents using tags to differentiate documents and the consequent return periods.


6. Create A System

Filing business taxes can be tedious, but creating a functional system can make it easy. You can start creating a system by organizing your documentation and taking the time to comprehend your tax obligations. While it might take a lot of time and energy to establish a sustainable approach, the benefits to your business would be tremendous.

Nevertheless, you must ensure your system gets updated whenever your business has new tax obligations. You’ll have to regularly revisit the process to ascertain it’s still meeting the business needs. Eventually, you’ll spend less time and resources on tax compliance for your business.

Conclusion

Ensuring your small business is tax compliant can be complex and stressful. Despite the difficult and tedious process, you must ensure your business files the appropriate tax documents on time to avoid being penalized. You can make the taxation process for your business easy by creating a system that works for you. Feel free to consult a professional if you’re not confident about the taxes you’re supposed to file for your business.

Benefits of outsourcing your accounting and bookkeeping services

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StrategyDriven Managing Your Finances Article |Outsourcing accounting and bookkeeping|Benefits of outsourcing your accounting and bookkeeping servicesThe world has become a global village, and businesses must operate in a competitive market. And this has led to enterprises needing ways to reduce their costs while maintaining a high-quality level. One way of doing this is by outsourcing their accounting and bookkeeping services.

According to a report by Forbes, “Outsourcing can help businesses reduce costs by up to 30%.”

There are many benefits of outsourcing your accounting and bookkeeping services. Here are just a few:

1. Cost savings:

As mentioned above, cost savings is one of the main benefits of outsourcing your accounting and bookkeeping services. When you outsource these services, you will no longer need to hire full-time employees to do the work. It can lead to significant cost savings for your business. You can find many reputable and affordable accounting and bookkeeping services online. You can search with the city or state name and “accounting firms” to get started or look for national firms that operate in your area.

Many leading firms in California are prominent for their cost-effective services. However, it would help if you were careful when selecting a firm. Check the reviews of the firm and its services before hiring them. Luckily the Sacramento accounting firm Busy Bee Advisors provides a hassle-free and cost-effective solution for any business. With the recent surge in demand by startups in California, it has become one of the most sought-after firms in the state.

2. Improved quality:

Quality is always a concern when businesses outsource their services. However, when you outsource your accounting and bookkeeping services to a reputable firm, you can be assured of receiving high-quality services. The firm will have a team of experienced professionals who can provide you with accurate and up-to-date financial reports. And it will help you make better decisions for your business.

But how is this different from in-house accounting? Anyone can do in-house accounting with some basic training. However, it is unlikely that they will have the same level of expertise as someone who has worked in the field for many years. It is important to outsource your accounting and bookkeeping services to experienced professionals. However, this does not mean that you should not monitor the progress. You should still review the reports and statements before making any decisions.

3. Save time:

Another benefit of outsourcing your accounting and bookkeeping services is that it will help you to save time. It is because you will no longer need to spend time training employees or doing the work yourself. You can use this time to focus on other aspects of your business. It will help you to grow your business and achieve your goals. In fact, according to a study, companies that outsource can grow faster than those that don’t. And the reason for this is simple: businesses that outsource these services have more time to focus on their core competencies.

4. Focus on your core competencies:

As mentioned above, when you outsource your accounting and bookkeeping services, you will have more time to focus on your core competencies. It is because you will no longer need to spend time on activities unrelated to your business. For example, if you are a marketing company, you will no longer need to spend time on accounting and bookkeeping. You can use this time to focus on marketing activities that will help you to grow your business. It will help you to achieve a competitive advantage in the market. Also, you can focus on your customers by outsourcing your accounting and bookkeeping services. It is because you will no longer need to worry about financial reports and statements.


5. Access to the latest technology:

According to a study by the International Data Corporation, the global accounting and bookkeeping software market by the year 2025 will reach $11.3 billion. It is because more and more businesses are adopting cloud-based accounting and bookkeeping software. This software offers many benefits, such as real-time reporting, improved security, and scalability. When you outsource your accounting and bookkeeping services, you will be able to get access to the latest technology. It will help you to improve your business processes and make better decisions.

6. Increased flexibility:

The more you grow your business, the more you will need to scale up your accounting and bookkeeping services. It is because your business will generate more transactions and data. When you outsource your accounting and bookkeeping services, you can scale up or down as needed. It is because you will only be paying for your required services. It will help you to save money and be more flexible in your business operations. In addition, you can also choose to outsource only certain aspects of your accounting and bookkeeping services. For example, you can outsource your payroll services but keep your accounts receivable and accounts payable in-house. It will help you to save money and be more efficient in your business operations. You might also try accounting automation.

7. Improved cash flow:

As the saying goes, “Cash is king.” It is especially true in businesses. You can improve your cash flow when outsourcing your accounting and bookkeeping services. It is because you will have more time to focus on activities that will generate revenue for your business. Also, you can save money on your accounting and bookkeeping services. It is because you can get discounts from your service provider. In addition, you can also improve your cash flow by delaying payments to your service provider. It is because you will have more time to generate revenue and pay your service provider. However, you should only do this if you are confident that you can generate the revenue to pay your service provider.

Conclusion

The way you manage your finances can make or break your business. It is why it’s essential to have a good accounting and bookkeeping system in place. However, you can always outsource your accounting and bookkeeping services if you lack time or resources. Outsourcing these services can offer many benefits, such as improved efficiency, flexibility, and cash flow. Now that you know the benefits of outsourcing your accounting and bookkeeping services, you can decide if this is the right solution for your business.

Ways Financial Experts Can Assist Small Business Owners

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StrategyDriven Managing Your Finances Article |Financial Experts|Ways Financial Experts Can Assist Small Business OwnersBusinesses need money to function and grow. But not all business owners have the financial expertise to make sound decisions about allocating their resources. And this is where financial experts can step in and help.

Financial experts can provide small business owners with the guidance they need to make intelligent decisions about their money. They can help them develop a budget, track expenses, and make sound investments. Financial experts can also offer advice on how to raise capital and negotiate loans.

In addition to providing financial advice, financial experts can also help small business owners keep their books in order. They can prepare financial statements, reconcile accounts, and handle payroll. Read on to explore the ways financial experts can assist small business owners.

1. They can help you develop a budget

One of the most important things a financial expert can do for a small business owner helps them develop a budget. A budget provides a roadmap for where your money should go and how much you can afford to spend in each area. Without a budget, it’s easy to overspend and jeopardize your business financially.

A financial expert can help you create a budget that makes sense for your business. They can help you track your income and expenses and identify areas where you may be able to cut costs. A budget can also help you plan for future expenses, such as hiring new employees or expanding your operations.

You can also hire professional services to help you with this task. But make sure the service provider has a CPA license and certification to offer these services. It will ensure you’re getting quality advice from someone who knows what they’re doing.

2. They can help you track your expenses

In addition to helping you develop a budget, a financial expert can also help you track your expenses. It is essential because it allows you to see where your money is going and identify areas where you may be able to save.

Tracking your expenses can be done manually or with the help of accounting software. If you do it manually, keep receipts and documentation for all your business expenses. This will make tracking your spending easier and identify patterns over time.

If you use accounting software, many expense tracking features can make your life easier. For example, you can set up alerts to notify you when you’re approaching your budget limits. You can also track your spending by category, which can help identify areas where you may be able to save.

3. They can help you make sound investments

Another way financial experts can assist small business owners is by helping them make sound investments. This may include investing in new equipment, real estate, or other assets.

Investing can be a great way to grow your business. But it’s important to do your homework and understand the risks involved. A financial expert can help you assess different investment opportunities, risks, and potential rewards. They can also offer advice on diversifying your investments and protecting your capital.

4. They can help you raise capital

If you need money to grow your business, a financial expert can help you raise capital. There are many ways to do this, such as taking out loans, selling equity in your business, or issuing bonds.

Raising capital can be a complex and time-consuming process. A financial expert can help you navigate the different options and find the best solution for your business. They can also offer advice on structuring loans and other financing arrangements.

5. They can help you negotiate loans

If you need to borrow money to finance your business, a financial expert can help you negotiate loans. They can help you get the best terms possible and find lenders willing to work with you.

Negotiating is considered an essential skill when it comes to business. But it can be challenging to do if you don’t have experience. A financial expert can help you understand the process and the tools you need to succeed.


6. They can help you manage your taxes

Another way financial experts can assist small business owners is by helping them manage their taxes. This includes preparing and filing tax returns, making estimated tax payments, and resolving tax debts.

Taxes can be complex and confusing. But a financial expert can help you understand the process and comply with the law. They can also offer advice on how to minimize your tax liability.

7. They can help you plan for retirement

If you’re a small business owner, you may not have time to consider retirement. But it’s essential to start planning for it early. A financial expert can help you understand the different retirement options and choose the best one for your business. They can also offer advice on saving for retirement and ensuring you have enough money to cover your costs.

If you’re looking for ways to improve your financial situation, consider working with one. Financial experts can offer a lot of valuable assistance to small business owners. They can help you make sound decisions and achieve your financial goals.

8. They can offer advice on financial planning

If you want to get your finances in order, a financial expert can offer advice on financial planning. They can help you create a budget, set financial goals, and develop a plan to achieve them. They can also advise regarding investment, retirement savings, and tax management.

Not all financial advice is created equal. Make sure you work with a qualified financial expert to give you the guidance you need.

9. They can offer advice on estate planning

If you’re a small business owner, you may not have time to consider estate planning. But it’s essential to start planning for it early. A financial expert can help you understand the different options and choose the best one for your business. They can also offer advice on how to transfer ownership of your business, create a will, and plan for your family’s future.

A financial expert can help you understand the different options and choose the best one for your business. They can also offer advice on how to implement your plan and ensure it’s successful.

10. They can help you find sources of funding

A financial expert can help you find funding sources if you need money to grow your business. There are many options available, such as loans, grants, and investment capital. A financial expert can help you understand the different options and choose the best one for your business. They can also offer advice on approaching potential investors and getting the funding you need.

If you’re looking for ways to improve your financial situation, consider working with one. Financial experts can offer a lot of valuable assistance to small business owners. They can help you make sound decisions and achieve your financial goals.

Conclusion

In a nutshell, financial experts offer a lot of valuable services to small business owners. They can help you understand the different options and choose the best one for your business. They can also offer advice on managing your finances, saving for retirement, and finding funding sources. If you’re looking for ways to improve your financial situation, consider working with a financial expert. They can help you make sound decisions and achieve your financial goals.

How to Invest Profits Back Into Your Business

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StrategyDriven Managing Your Finances Article |Invest In Your Business|How to Invest Profits Back Into Your BusinessWhen your business is doing well and you’re turning a profit, you really need to think about how you can turn those profits into something more significant and meaningful. Sure, the cash is good, but what can be done with it to grow the business even further and make its long-term future brighter?

It’s all about investing profits back into the business and looking for the most sensible and sustainable ways of doing exactly that. If it’s not something that you’ve no done much of before and don’t have experience of, don’t worry because we’re going to talk about some of the ideas for how to do it today.

Invest in Time-Saving Software

When businesses start to grow and they have a little more capital at their disposal, one of the things they often focus on is streamlining and time-saving. If your business is not currently running in the most efficient way possible, it’s certainly not too late to do something about that. By looking for time-saving alternatives, such as new software solutions, you can free up the time of your employees and achieve more in other areas.

Create a Cash Buffer

If your business doesn’t yet have any kind of cash buffer in place that you can fall back on, that’s something that you’ll definitely want to take a look at and assess. It might not seem like a big deal right now, but if something were to go wrong in the future and you had an unexpected expense to deal with, it might really hit your business. So having that cash buffer to fall back on is definitely a good idea.

Consider the Best Ways to Invest in Your Team

Investing in your human capital is a good idea as well. A business is only ever as strong as the people working for it, so you want to make sure that you have the best possible team in place and you’re always looking for new ways to invest in their talents or to bring new talent into the fold if you want to grow the team.


Explore New Marketing Strategies

Exploring your new marketing strategies and how they might work for you could be a good use of that money. When you want to get your business noticed by more people, you have to market it in the correct ways; it really is as simple as that. If you’re not always looking for new marketing opportunities and ways of getting noticed by your target customers, you’ll run the risk of falling behind and that’s certainly not what you want to happen.

Upgrade the Equipment You Rely on Most

Investing in new equipment that’ll help your business move in a more positive and efficient direction going forward is never a bad move. When you have equipment that’s getting old, it slows down production or the basic tasks that keep your business ticking over. So if, for example, you need a new plasma cutter and you think that purchase will increase efficiency and you rely on that equipment each day, it might be a good investment to make going forward.

Mergers and Acquisitions

Merging with another business or acquiring a smaller business might not be something that you’ve thought about before, but it can be a good path to take. It helps you to grow the business relatively quickly. Eating up small competition and bringing them into the fold is something that big businesses have been doing for many decades and longer, but you don’t have to be a huge corporation to make the most of the acquisition opportunities that are out there.

Pay Down Existing Debts

If your business still has debt hanging over it, this is something that you’ll definitely want to think about and work on at the earliest opportunity. It’s rarely a good thing to let that debt build up and accrue interest over time. It’s far better to clear the debt at the soonest opportunity you get. So although that might not seem like a way of reinvesting your profits back into the business, it really is because by doing so, you’ll make the business’s financial future much brighter.

As you can see, there are lots of different ways in which you can invest your profits back into the business and help to grow it even further going forward. Be sure to make the most of the tips and ideas we’ve shared here today if you intend to give your business the best shot at success moving forward.

Tips for Improving Your Business’s Financial Reporting

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StrategyDriven Managing Your Finances Article |Financial Reporting|Tips for Improving Your Business's Financial ReportingInaccurate financial reporting doesn’t only make your business look substandard to key stakeholders and investors, but it can also lead to a loss in finances and attract the attention of certain regulatory bodies. Several factors affect the standard of financial reporting, like old systems, poor security, and inadequate communication. However, here are seven suggestions to improve your company’s financial reporting.

Large Data Analytics

The capability of analytics is helping make large data manageable in companies worldwide. In finance — which mainly focuses on data from several sources — analytics would make a huge difference when dealing with your business’s data, and eventually result in more intelligent reports.

Cloud Storage

Cloud storage is easy to use and free if you utilize programs such as Dropbox or Google Drive. However, you could always pay for additional storage. Storing your information in the cloud allows everyone to easily access and share documents.

Integrate Your Information

Due to the importance of your business’s financial statements, it is advisable to have one final file that would serve as the endpoint for every data in the reporting cycle. This file should only be accessed by someone with total accountability and this individual must be responsible for checking whether this data is accurate or not.

Accept Technology

These days, finance is tech-driven, and the businesses that can efficiently adopt and utilize leading technology will have the advantage over others. Find time to update yourself on the most recent financial systems and software.


Make Your Employees Accountable

People are the leading factor that affects the standard of financial reporting. Managers must ensure that their employees are delivering at the highest quality, by regularly analyzing financial reports ethically and accurately. Improving transparency can also result in better work quality because accountability encourages employees to perform more efficiently.

Work In Unison With Other Sectors

All sectors in a company are involved when it comes to financial reporting, though not all sectors generate income, each sector has costs linked with them. Ensuring optimal collaboration between every sector will result in more comprehensive financial reporting. By developing a strong collaboration between your employees, you can emphasize how accurate proper financial reporting is.

Safeguard Your Data

Safeguarding your information is important in maintaining the validity of your financial data. As the world becomes more technologically inclined, cybersecurity becomes a bigger concern. Even major tech companies suffer from hacks and data theft. Businesses of all sizes must ensure to set up cybersecurity protocols.

Utilize Data Visualization to Get Insights

Data visualization is becoming a necessity with investors, the board, and senior managers increasingly waiting for finance to deliver actionable insights which would drive businesses forward. Data visualization utilizes diagrams, maps, charts, and additional visual elements to give a clear story of what’s going on past the numbers.

By prioritizing your people, systems, and the security of your data, you can significantly increase the standard of your company’s financial reporting. Always ensure to use the tools at your disposal, including programs and technologies. And if you are having a hard time running your business, you could always get a virtual CFO.