The Importance of Accounting in 2020 and Beyond
January 20, 2020Everything You Need to Know About Payroll Taxes
January 20, 2020
Starting and maintaining a business can be overwhelming. Several companies get side-tracked and lose sight of their long-term objectives. The financial health of your company starts from the very beginning. In fact, it starts the moment you decide to open an account for your business.
And the more you grow as a business, the more business tasks you will have to maintain. Now, it might sound pretty straightforward in the beginning, but it takes passionate drive and utmost perseverance to realize the true potential of your business.
Besides, business owners are aware of the fact that every business milestone has an expiration date. And this is where accountants come into the picture. It’s a way for businesses to maintain continuous growth and set new milestones.
Here are some of the guidelines an accountant can establish to rejuvenate your business:
1. Establish a Realistic Bookkeeping Mechanism
Contrary to popular misconception, the bookkeeping is different from accounting. Technically, bookkeeping involves a daily record of your business transactions. Furthermore, it includes bank reconciliation statements and categorization.
Accounting, on the other hand, is a higher standard that tracks the progress of your business. In short, accountants contextualize the bookkeeper’s information to build errorless financial statements.
2. Perfect Your Gross Margin Calculations
Once you begin to improve your gross margin calculations, it’ll increase your overall annual earnings. There’s no rocket science to it; gross margin calculation involves a total cost to create a product or service. The more you understand the intricate nature of your gross margins, the more quickly you will be able to calculate the Cost of Goods Sold (COGS).
3. Create a Payroll System
Business owners often have to hire part-time or full-time employees to take care of business needs. You can, of course, hire a freelancer and save the extraneous cost to hire an employee. That said, you need to create a payroll system that helps you distinguish between employees and independent contractors.
When it comes to employees, finalize a payroll schedule and make sure you are withholding the right taxes. As for the independent contractors, monitor the amount you’re paying to every individual.
4. Pay Attention to Import Tax
Though it depends on the nature of your business, you might be thinking of buying import goods from a non-European country. Companies, for instance, often forget about the basic details when it comes to tax responsibilities and different regulations concerning the import.
The best course of action for your business would be to learn the import tax fee of certain goods. And that’s because each item may have a different tax association. You don’t necessarily have to find out every detail; your accountant can check the imposed rules for each imported item.
5. It’s Okay to Re-Evaluate Your Business Strategy
Maybe when you started your business, the maintenance of books was perfectly fine through a spreadsheet. But if you want to grow and expand your business reach, you will need to upgrade and meet new accountant standards. It’s never too late or too early to re-evaluate your core financial strategy. Instead, it would be best if you thought of it as an opportunity to grow as a business and mark uncharted territories.
The Last Words
Businesses need to be at the top of their accounting game. And the right accountant at the right time can save your business a lot of money. It’s the money you can diversify to other business operations.
We can help with all of your business and personal tax and financial planning needs. For a strategic review of your finances, please contact us.
Disclaimer: We don’t take any responsibility for actions taken based on above information. Please speak to our financial advisor if you need more information. This guide was written specifically for Smart Accounting clients. Some of the information contained in this guide might not be applicable if you do not have a business managed by Smart Accounting. By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details are correct at time of writing.
