Business owners, whether they are involved in small businesses or big ones need to prepare their accounts.This process can be elaborate, complex and time consuming and taking professional help is advised. This is where accounting and taxation professionals come of assistance. They ensure that all the financial records of a business are in order and the financial resources have been properly audited. However the range and types of services offered by independent accounting professionals can be significantly different. There are those who offer only Accountancy, Tax services and also those who offer only tax consultancy. One also comes across services providers who offer both accountancy and taxation services. Before one selects and hires the services of a provider it would be helpful to have an idea of the scope of their work.
In layman terms accounting refers to the process of recording the transactions that take place in the running of a business on a day to day basis. These transactions can be in the form of cash sales, sales invoices, cash received, purchase receipts, expense invoices and credit notes among others. The transactions are entered into accounting books following the double entry system. The increasing use of computers and availability of simple and feature-rich accounting software has ensured that more businesses prefer to maintain computerized accounting records. Professional accounting services providers also encourage the use of computerized accounting and their services may include developing custom accounting software for the unique requirements of their client’s business as well as training personnel who will be working on it. The accounting software available nowadays support a wide range of features and can create many different kinds of reports which help decision makers analyze the state of their business objectively and accurately, and arrive at the best decisions.
Accounting and taxation services frequently go hand-in-hand because taxation depends upon accounting records. Now taxation rules can be quite complex and they keep getting updated. It would be too much to expect from business owners to keep themselves updated with all the tax laws that are applicable to their business. Taxes are a major revenue generating source for the government and it levies several types of taxes on businesses and individuals. Income tax is a type of tax that is calculated depending upon the income of a business or individual. Every year the government determines a series of scales for the payment of taxes. People then pay taxes according to the scale they fit in.
Business taxation system is more complex compared to calculating and paying individuals’ income taxes. These taxes are based on a company’s profits which can also be termed as its taxable income. They are not only applicable to business organizations but also to associations, clubs and societies. Value added tax or VAT is a type of tax that is levied on business organizations. VAT is governed by very complex regulations, it has many requirements like VAT registration, compulsory registration timing, VAT planning and administration, Customs and Excise VAT, VAT on imports and exports, and the positive and negative points of voluntary registration. Accounting and tax consultants help individuals and organizations by determining their tax liability and helping them fill out the relevant forms and pay their dues.
The accounts of a business organization or an individual are thus not only important for running the business smoothly and profitably but also in satisfying the government’s tax requirements. With such critical purposes to be fulfilled it is but necessary that one should take the assistance of qualified accountancy and tax consultants.
Accountancy is perhaps one of those areas of business about which people tend to be less than enthusiastic. Perhaps the idea of breaking out of the humdrum office existence and forging an entrepreneurial career, or perhaps working from home or buying into a franchise opportunity all sound fantastic, but when reality kicks in and the tax man comes knocking, accounts have to be in first class shape.
Often, to begin with, this isn’t too difficult, with either hand written ledgers or perhaps a simple, basic spreadsheet set up to take care of the basic incomes and expenditures. But gradually, little by little as time passes by and your business continues to expand and your workload becomes increasingly important, the accounts can become patchy, with errors, omissions and issues occurring that can be hard to consolidate with the figures represented by the bank balance.
Deciding to be in business only for yourself is, probably, something that most people would like to get into the business of doing – being their own boss, setting your own rules and running a company how you would like to see one run. This is of course in addition to taking all the credit for building the firm and of course, enjoying the takings. Accountancy, Tax can help one reduce tax in a major way.
However one aspect of that that scares people from working for themselves is the accounting and taxation side of things. Many people have a natural aversion to numbers and accountancy, and many cite this as a reason for not taking the plunge to decide to work for themselves.
While running your own company may sounds easy, it is not. Keeping track of your accounts is something many dread and, understandably, business owners simply don’t have the time or inclination to do. This is where tax consultancies come in – as well as some hired help on a regular basis to keep things ticking over, making sure your invoices are sent out and chased up in a correct manner, and that everything is recorded in due course, in line with legal obligations.
There are a lot of business owners that fear the end of the tax year, as it requires extra work, but that doesn’t always need to be the case, since it doesn’t need a lot of work at the end of the year if you do certain things throughout the year. Keeping track of your business records throughout the year is essential – as it is essential to declare income and expenditures, and pay tax, of course.
The chances are that if you’ve been working for yourself for any period of time, you’ve already some form of routine whereby your finances are tracked regularly, of not constantly to track your finances. Yet one of the top problems small business owners say gives them the most headaches is not finding the time to do it on a regular basis. Considering the variety of other priorities there are always reason to justify taking the time out, or the resources, to get this done.