Money makes the world go around, and tax is part of that mechanism. As a businessman or woman, that makes you part of it too, like it or not.
So how do you make sure you pay the right amount of tax? Too little gets you into hot water; too much is, well, too much.
Get a good accountant. Far more than number-crunchers, good accountants know how tax works, what’s allowable and what’s not. It’s their area of expertise to explain that all to you in a language you understand, freeing up more time for you to do business. (You don’t do your own books, do you? Whatever for? OK, it may cost less, but how much value do you put on your time? Factor that in, and DIY bookkeeping starts to look expensive. Especially if you make mistakes.)
Data, data, data. No matter how good your accountant is, he can’t do a proper job if your record keeping is sloppy. That’s where expense management software comes in, putting it in the palm of your hand a means of accurate record keeping that will ensure all of your numbers are there and will stand up to scrutiny. These days online expense management software is the way to go; accessible anywhere you have a WiFi signal, it means there can never be an excuse for failing to record an expense. You’ll be glad you did come the year-end.
Don’t be late. Even if your tax records are accurate to the penny, you’ll still pay a fine if you’re late with the payment. Frankly, there’s no excuse. Take the UK tax system, for instance. Personal tax is based on a financial year ending in early April, and yet the deadline for payments is the end of January the following year. How much time do you need? Increasing numbers of people complete tax returns on line on Christmas Day. Some of them must really dislike their families, wouldn’t you say?
Talk to the accountant. Understand how best to collate the data you’re gathering. Making the accountant’s job easier will mean your accounts can be sorted faster, and quite possibly more cheaply. Failing to have this conversation may mean you’re recording expenses incorrectly, which is a waste of your time and his.
Get everyone on board. Expense recording is a team game and not a solo sport. Any company employee who has the authority to spend money must also have the responsibility to record it accurately, and it’s your job, as business owner, to see that they do. This is another area in which a good piece of expense management software scores for you, for as well as recording numbers, it will also define expense policies. Added to that, you’d expect it to work on a smartphone, so there can be no excuse for not having all the accurate numbers to hand at the flick of a thumb.
More than just numbers. And speaking of policies, online expense management software delivers other benefits, such as eliminating fraud, for instance. Take mileage claims as an example. Using a paper-based system an employee is able to inflate the actual mileage of a journey by a few miles, increasing the expenses claim, and the cost to your business, as a result. A feature of good online expense management software is that it can use GPS to record distances travelled, removing temptation from the path of the employee, making the transaction fair for all concerned.
Keep money separate. Company and personal money should be like oil and water – they shouldn’t mix. Sadly, there are circumstances when oil and water do mix, and it’s a devil of a job to separate them. Same’s true for personal and corporate money, so in all cases, it’s better that they don’t mix in the first place. As far as monies concerned, expense management software gives you an edge there, because it can be allied to a specific credit card – and company one – which means there will always be a clear distinction between what’s business and what’s not.