If you extended your corporate taxes this year, that means you should have filed your final tax return to Uncle Sam by September 15. You’ll also have to pay any remaining tax due, which could be subject to penalty. Ouch.
As if writing a fat check to the IRS isn’t painful enough, you’re in for an even bigger headache if you haven’t kept your company’s books in order throughout the year.
While the pain of this year’s tax bite is still fresh and throbbing, now is the time to learn from your mistakes and make a promise to yourself to do better next year – starting with how you manage your finances.
Here are three ways your business can benefit – at tax time and all year round – by keeping your financial records consistently accurate and up to date:
1. Avoid costly penalties
When you make late or insufficient tax payments because of poor recordkeeping, your business is subject to penalties from the IRS.
On the other hand, if your books are always up to date, your estimated payments will be more accurate and there should be no need to ever request an extension.
2. Skip the financial cleanup crew
You might think you’re saving your business money by not hiring a professional to consistently manage your finances, but you’ll end up making up for it at the end of the year when you need someone to clean up the mess as a part of your tax preparation. And at that point, you’re going to pay a premium for it.
Avoid the last-minute scramble and potentially hefty costs associated with it by making sure your financials get the attention they need on a consistent – ideally monthly – basis throughout the year.
3. Have financial intelligence about your business
Wouldn’t it be nice to not fall off your chair when the tax bill comes? And wouldn’t you like to know how much money your business actually has, without having to take a shot in the dark?
No more guesswork. No more end-of-year surprises. You should always know what your numbers are in order to make informed decisions for your business and be better financially prepared – especially at tax time.
In short: Don’t wait until tax time to deal with your accounting.
It’s going to be far easier and less expensive for your business in the long run to hire someone to continually manage your finances, rather than scrambling at the end of the year to get everything in order.
Don’t overlook the importance of reliable financial records when it comes to running a successful business. Otherwise, once tax time rolls around, you’re sure to pay for it.