No one enjoys tax time—not even accountants. And because businesses don't enjoy doing their taxes, they avoid them, as long as they can, until it is time to file them. It is only understandable, but does that mean that things can't change?
It is, after all, the New Year; with the gloom and fear that 2020 brought us, it is only natural that we are vying for some renewed energy—a chance for self-improvement. This is more so for businesses that are trying to recover from the pandemic. Here are seven tax resolutions that businesses can make to alleviate the stress of meeting tax deadlines this year:
1. Organize, Organize, Organize
This first resolution cannot be emphasized enough.
Whether your business is using cloud-based accounting software, it is impossible to move everything on the digital platform. This means you will find yourself with important tax documents such as signed contracts and/or other agreements, at one point in time or another. When this happens, it is important how to tackle these documents. Remember, they are of immense value and it is never too early to begin organizing them. A simple method that businesses often use to organize is by filing paper documents in a portable file box.
More importantly, you need to keep these files in a place that is safe—as part of your disaster preparedness plan. It is also not a bad idea to reduce the number of hard copies that your business creates throughout the year. But if you cannot avoid them, keep them organized, filed, and in a safe place, so that on your next trip to the accountant's office, you have them handy.
2. Bring Professionals on Board
Your business is responsible for ensuring that its taxes are filed properly. Anything amiss can have serious consequences for your business. Therefore, you must consider bringing professional tax planners to your team.
By seeking this professional advice and guidance, you will feel more confident when filing your tax returns. Additionally, you will be surer that your business is complying with regional and national tax regulations. A tax professional can help your business with deductions, credits, and other benefits that your company might qualify for.
Taxes can quickly become very complicated and it is not a bad idea to have someone help you identify new tax laws and codes that can affect your business.
3. Spend Some Time on Taxes
Taxes are not much different from staying in shape. You have to work out every day or at least as many times in a week as your body needs. Taxing is the same game. You need to make your taxes a priority and not just during the tax season.
This New Year, let this be your resolution—schedule tax preparation time every week. It might only require thirty minutes of your time at the end of each week. You can review your books, file your receipts electronically, plan your payments, and more.
Reviewing your books weekly helps you monitor your cash inflow and your expenses; it also helps in identifying any adverse issues beforehand, giving you ample time to decide upon a course of action to rectify them. With just this much, you will be far ahead and better prepared for the tax season.
4. Review Your Objectives
A New Year is a good time to reflect upon your business.
Did your business grow or shrink? How was last year? Ask those important questions and assess if your business is still fulfilling its objectives. If you had a list of goals, did you meet them effectively? If not, what can be done to achieve them? How has your business changed in the last few years?
Look at the revenues and sales, and determine what is working and what is no longer serving your business.
5. Maintain a Professional- and Personal-life Balance
This may seem unimportant but maintaining a balance between your personal and professional life is important – even during the tax season.
Some things can be simple: don't work after midnight; eat at least three dinners with your family; refrain from checking your emails regularly.
Encourage your employees to do the same by creating a team flexibility plan.
Remain committed to this resolution and watch how it flows into other areas.
6. Use Technology Wisely
Make it a goal this year to use technology effectively. For instance, this might be a good time to update your payroll system. A small change as this can have drastic effects on your business—it can streamline your business operations, save money, and time.
Another solution worth considering is getting rid of the manual legwork. Using a business credit card can become a valuable resource. Most business credit cards organize purchases into different categories, making tracking them easy. Additionally, you will receive a back-up record of your credit card statement which can be used for documentation purposes. But here is the real reason why you should consider switching to a business credit card – paying your expenses with a credit card builds your business' credit.
But don't forget to pay off your balance each month.
7. Outsource Your Accounting
You need to become a better steward of your business' financial assets.
At the same time, you have to accept that you might not be able to find all tax-saving opportunities or increase your income. There is always so much going on with a business that something is bound to take the boot. Businesses that have their accounting functions in-house usually struggle with this – they spend more time on accounting and taxing inadvertently.
Therefore, it might be a good resolution to consider outsourcing your business' accounting function. Not only does this increase your efficiency and performance, but it also reduces your costs, saves time, enhances security, and gives you access to accounting resources that you did not have before.
More importantly, you will be able to focus on other business functions that you have more control over leaving the financial matters to professionals.
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