Plenty of paperwork, planning, and managing goes into running a business. As a business, there is some paperwork you can’t avoid, and that includes taxes. Taxes are an important cog in the well-oiled machine of any business.
Making a mistake with your taxes can spell disaster for your business, get you in trouble with the law, and ruin you financially. Whether you’re a small start-up or a large multinational company looking for help, you’ve come to the right place. Here’s everything you need to know about managing your business taxes the right way. Follow this guide and make sure you’ve got your taxes under control!
Find the right accountant
The first step to making sure your taxes are under control is to find the right accountant. Although there are many ways to do profits tax computation by yourself, having an experienced professional on the job is a good idea. You need a keen eye for detail, exceptional organizational skills, and a sound background in accounting to do your taxes right. With the right accountant, you can rest assured knowing that your taxes and finances are being handled properly. Take the time to seek out and hire the right accountant and your future self will thank you.
Know the essentials
Whether you have a professional accountant or not, you need to take your finances into your own hands. You don’t need a new dictionary or to know everything about finance to understand the basics of tax returns. Start by learning the financial jargon that you’ll commonly come across and need to know. Learn the basics of revenues, cost of goods, gross profits, and net sales for starters. Be up to date with your business’s finances and know how much money is going in and out. Knowing the basics will help you make sure you can keep up with your taxes and stay out of trouble.
Separate your finances
Another good practice for managing your taxes as a business is to separate your finances. Separate your business and personal finances by creating a separate account for your business. This will help you have a better overview of the situation and will help you keep your finances more organized. Having separate accounts will help you navigate tax season easier and will make making any big mistakes less likely. This will keep your personal transactions private and through the distinction, you can write off your expenses with ease.
Keep accurate records
Having separate accounts for your business and personal finances is only the first part of managing your taxes. To make sure you have your taxes under control, you need to be organized and keep accurate records of your spending. Outdated, disorganized, and cluttered financial records will be the death of your company. Make an effort to collect all financial data for your business and create a system to organize and store it. Pull bank statements to keep track of your income and outgoings as well as receipts or invoices. Take care when dealing with “free samples” and remember to mark them as marketing expenses.
Track your inventory
If you want to have a solid hold on your finances and taxes, you need to keep track of your inventory. During the busier months, it’s easy to lose track of your inventory and suffer the consequences once tax season comes up. You need to be doing inventory counts often and have a constant idea of what your inventory value is. Doing this calculation by hand can be time-consuming and confusing, so getting a good bookkeeper is key. Whether you use specialized software or not to take inventory, you need to do it to keep your taxes under control.
Built your business credit score
Last but not least, to have smoother sailing during tax season, you need to work on boosting your business credit score. Whether you work in real estate or finance, a good credit score can help you in many aspects. Having good credit means that you can land better contracts and can help you with managing your finances. To build good business credit, you’ll need to invest and make good on your payments by paying them off on time. This will both help you boost your credit and will help you manage your finances come tax season.
So there you have it! With these tips in mind, you’re all set to combat tax season like a pro! Put your best foot forward as a business and find the right accountant. Make sure you know the basics and start managing your finances by separating your accounts. Keep accurate records of your finances, spending, and inventory to make sure you don’t miss a beat. Last but not least, work on improving your credit score to get more benefits and learn the ropes. Keep this guide in mind and you’re sure to handle your business taxes like a pro!