Tax troubles are every corporation’s nightmare due to the potential consequences they could incur. This can not only affect the corporation’s reputation, but also in the progress of it’s business dealings. In order to avoid incurring tax troubles, great attention should be placed into the data figures and required filing processes. The more reliable your generated information is, the less your corporation will be at risk when it comes to tax trouble. Maintain accuracy in your accounting process by keeping these accounting basics in mind:
Take measures to ensure proper bookkeeping methods are kept consistent. The more consistent and error free your accounting basics are, the more accurate your financial documents are. Ensure that they are reviewed and organised properly so as to better help draft your financial statements. This will in turn help you ensure statutory compliance with IRA and ACRA. Apart from observing accounting basics, it is also crucial to be aware of the legal requirements and tax regulations of the specific location the current corporation is based in, since they can differ from others.
Consult relevant tax authorities as well as other employees who are highly equipped to deal with tax problems whenever necessary. In corporations, the employees who are usually skilled with tax expertise would be the corporate secretary.
All accountants are also highly advised to sign up for both accounting training and tax training so as to gain clearer insight to it. The best possible recommendation would be to locate training sessions that involve both accounting and tax training together in one- this facilitates accountants in understanding how they correlate with one another and how best to achieve accurate results with both accounting basics as well as tax regulations in mind. With better training, avoiding tax troubles can be a lot easier.
Using and Updating Account Software
In order to avoid potential tax troubles, make sure to invest in the right tax and accounting systems. A good recommendation would be to look into software programs that are tax compliant, like MYOB. By using software that guarantees tax compliance, you will be able to provide accurate accounting results for your calculations. Apart from investing in the right tax and accounting tools, also make sure to keep the software program up to date. By frequently updating your software, it not only ensures that minor bugs and security risks are fixed, but also that tax compliance will be met with the updates.
Corporations who have taken the time to invest in tax or accounting systems should also take note to ensure that all employees rely on the same standardised tax systems while working with calculations. Working outside of these systems should be discouraged since the reliance on figures that are outside of the standardised system can complicate the process. It is also potentially risky since there will be no ‘paper trail’ for auditors to work with when reviewing for errors. This means that there can be distortions for analyzing tax data.
Avoid Dubious Accounting Practice
Regardless of whether you are preparing the accounting documents or if you are tasked to review the calculated figures, keep an eye out for dubious accounting practice techniques. Certain techniques like profit smoothing may fall under the grey area of what is acceptable when it comes to accounting basics, however they are generally ill advised since great care has to be taken into consideration. Any lapse in consideration can result in inaccurate accounting results and place companies at risk for fraud.
Ensure that all dubious accounting practice techniques are removed so as to maintain the quality of your accounting results.
The records you keep should contain enough information that allows both yourself and others to comprehend for transactions and other important essentials. Ensure that they are kept up to date by regularly updating or performing changes straightaway whenever necessary. It would be good to include descriptions of what the journal entry is for, as well as the dates it has been recorded as well as it’s completion status. Whenever there are discrepancies, these records can be referred to for clearer explanations.
Ensure that accounting practices are done well so that tax filing can be prepared and submitted on a timely basis. Your corporate secretary and auditor should be able to facilitate and oversee the process by ensuring that all necessary information is kept error free. Retain and hire professional tax staff to assist in reports and reduce misjudgments in accounting basics as well as oversight.
Careful caution is advised so that corporations can avoid closing the accounting books prematurely. Make sure all necessary information is collated, calculated and worked through so as to avoid processing mistakes that could potentially skew accounting figures.
Before sending documentation like financial reports and the like, it is prudent to conduct and check the presented information one more time. Whenever possible, allow other authority figures or other colleagues to run through the report for any possible errors before sending the report out to the relevant parties. It is also a good opportunity to ensure that the information presented are an up to date version of your corporation’s progress.
These are just some of the accounting basics one can adhere to in their process of accounting and keeping track of data figures on behalf of the corporation. By taking the extra time to ensure that everything is in order, one is essentially paving the way for a better reputation and simplifying the end process of generating reports according to legal requirements. Assess your current accounting processes today and contemplate if you can incorporate any of the aforementioned accounting basics into your overall procedures. While the conditions to monitor in order to avoid tax trouble may seem tedious, they also serve a dual purpose in ensuring that your financial figures are as accurate as possible. Not only does it safeguard your corporation’s reputation, it also assists in allowing the corporation to make better informed decisions for growth.