Tax time can be very stressful for business owners if they are not prepared. To avoid scrambling for receipts, invoices and financial documents at tax time, it’s crucial that you stay organised throughout the year. Being diligent with your accounting obligations, bookkeeping and record-keeping during the year, will help to ensure that everything goes smoothly when tax time rolls around.
Nowadays, savvy business owners are leveraging technology to help them to keep up-to-date with their reporting obligations to the Australian Taxation Office (ATO). With the right software tools and platforms in place, you can make sure that tax time is a breeze. These powerful tools can look after a lot of the heavy lifting for business owners when it comes to tracking payroll, managing expenses and publishing financial reports. Many of these systems also integrate directly with the ATO’’s systems to ensure your business remains tax compliant.
Let’s take a look at a few simple tips you can use to ensure that you are ready for tax time 2021, and every year going forward.
Note The Important Dates
To ensure that you don’t miss any of the important tax reporting deadlines, make sure that you make a note of all of the important dates ahead of time. Whether you enter them into an online calendar, set reminders on your phone or write them in your diary, having a note of these dates is crucial in ensuring that you have time to plan in advance.
Keep Meticulous Records
Maintaining accurate records throughout the year will help to make your life much easier when tax time arrives. There are countless free and paid apps that you can use to easily keep track of all of your receipts, invoices and other financial records. Choose a system that you will be inclined to stick with moving forward to ensure you are consistent with your record-keeping each day.
Update Your Books Regularly
Updating the business accounts is not the most glamorous task and many business owners, who already have a lot on their plate, often put this important task on the long finger. Dedicating just one hour each week to updating your accounts will help to keep you organised ahead of tax time. What’s more, having up-to-date, accurate financial data will also allow you to make better business decisions in the future.
Understand The Basics
While you certainly don’t need to be a financial expert to ensure you are ready for tax time, having a basic understanding of what is required can help to make the process a little easier. Take some time to learn about some of the basic aspects of business accounting and what some of the different accounting terms and abbreviations mean so you can make sense of your financial reporting obligations.
Use A System That Works For You
Whether you choose to manage your accounts yourself using ledgers, install accounting software, hire an in-house accounting team or outsource your accounts to an outside firm, you need to choose a system that works for your business. Take the time to assess the cost, efficiency and reliability of the options available to you and choose a solution that will help you to stay in control of your tax reporting obligations with ease.
Make Sure That You Are Fully Prepared When Tax Time Arrives
As a business owner, you need to ensure that you are fully prepared when tax time rolls around. Being consistent with your record-keeping and accounting throughout the year will always pay dividends when tax time arrives. Be sure to put a system in place that will allow you to manage your finances with ease throughout the year and be diligent with your obligations. With this approach, you will avoid panic at tax time and make sure that you avoid incurring fines or other penalties for non-compliance with the ATO.