With tax deadlines on the horizon, it’s important to check you have all the necessary documentation, says GroForth CEO Sarah Daly.
Now that we are in September, tax deadlines are approaching. Have you checked that you have all the documentation that you and your accountant will need to file your return on time?
While few things are more frustrating than chasing down errors and trying to find missing receipts, it’s important to identify and address any potential problems now as this will help you avoid Revenue fines and penalties.
So, what can you do to make life easier for yourself and your accountant when preparing to file your tax return?
Here are a few top tips to get started:
- Get your records up to date. Cloud-based accounting solutions like Xero and SortMyBooks make it easy to share information with your accountant but these systems are only effective if you keep them up to date. If accurate record-keeping is something you struggle with, GroForth’s bookkeeping team can help.
- Check your sales records. Is your invoicing up to date? If there is a backlog, this needs to be tackled now. Sales only benefit your business if you get paid for them.
- Check your debtors. Keeping debtors under control is extremely important if you want to avoid running out of cash. Solutions like GoCardless can be a great way to deal with persistent late payers.
- Run an eye over your 2020 purchases. Check that all relevant purchases are listed and correctly coded. If you are in doubt about whether something should be included, ask your bookkeeper or accountant.
- Offloading difficult clients can be a great time saver. When reviewing your accounts, consider whether you have customers you need to drop — perhaps they are late payers, tyre kickers or take up too much unbillable time. Phasing these customers out could make your life easier next year and give you more time to focus on developing your business.
- If you are worried about having enough cash available to pay your tax bill, consider setting up a separate bank account for Revenue bills. By putting the VAT element of the invoice paid or about 20% of the income from each invoice you raise into this account, you will have money available to pay your tax at the end of the year. If you don’t already have a separate account, setting one up might be a good idea for next year.
Finally, keep in mind that whether you are a sole trader, an entrepreneurial start-up or an SME, GroForth can help you implement reliable systems and procedures so that you always have the necessary information available for your tax return. Check out our bookkeeping and tax services for details.
