Every business knows that tax debt is one of the biggest liabilities imaginable. Whether you see annual revenue of six figures, or seven or eight, you need to be sure that you’re crossing your T’s and dotting your I’s when it comes to compliance with the Internal Revenue Service. Accounting software is a common solution used by many businesses to calculate, file, and pay taxes — but how do you set up an accounting system for your business, and what are the requirements for a small business accounting system? Find out how to establish your accounting software so that it’s effective, efficient, and completely compliant with tax regulations.
Choose an Accounting Option
When filing taxes, the IRS allows businesses to choose between two different accounting methods. The first of these, a cash-based system, is often used by small businesses. It entails recording revenue as it comes in rather than waiting until it is invoiced. Similarly, expenses are recorded as they emerge rather than when you submit billing. The accrual method, on the other hand, can be more accurate, but it requires businesses to record income and expenses when the transaction occurs.
Find Software That Works
Once you’ve decided what kind of accounting method you want to use, you need to find software that meets your business’ needs. Most accounting programs probably have the features you need, but it may take some time and research to find the option that’s truly a good fit for your company. Some programs are tailored to small businesses, for example, while others are better suited to larger corporations. You should look for software that fits into your budget, offers all of the tools you need, and is easy to navigate.
Get Professional Help
Many business owners mistakenly think of accounting software as the solution to all any and all issues. Although it can be a helpful resource, it should not be viewed this way, and sometimes you need to enlist help from a professional when complex tax issues emerge. Failure to do so can be a major liability, and liabilities can cause your business insurance premiums to go up. You can avoid a business insurance claim and prevent any other problems by consulting with a professional when it becomes necessary.
Leverage the Data
Perhaps the greatest benefit of accounting software is the wealth of data that it can provide to companies. These programs often offer insights into your expenditures, revenue, and payroll stats. You should take the time to carefully review all of this information and leverage it to improve operations within your company. When viewed analytically, this information can help you see what’s benefitting your company, and more importantly, what may be hurting it.
About Haughn & Associates
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.
