As small business owners, we enter the new year with hopes for an improvement to the economy and dreams of success for our businesses.
Even if last year was a banner year for your business, there is always room for more prosperity, efficiency and growth. Here are some suggested new year’s resolutions:
I will computerize. If you haven’t yet done so, drag your Payroll into the 21st Century by installing Payroll software. Most packages are very simple for the non-payroll professional to use.
A decent accounting program simplifies tax return preparation and financial and tax planning because they generate comprehensive reports. Being able to compare payslips to see the differences from year to year can help evaluate and motivate employees.
I will audit proof my tax return by documenting red flags. Deductions such as travel, meals, and entertainment expense are often scrutinized for business intent. Be sure to back up those receipts and cancelled checks with other documentation such as flyers and names to substantiate business purpose. Using good payroll software will create an easy to understand and easy to access records for the future.
I will balance my books and checking account every month. Review your company’s financial statements on a regular basis to determine the progress of your business, pinpoint weak spots, and to plan for the future.
Your financial statements are the basis of all business decisions. The profit and loss statement and the balance sheet are the two main financial statements for you business. If you don’t know how to read them, ask your accountant to provide you with a short course. It’s not as tough as it looks, and you will get some insights that will bring improvement to your business operations.
I will track business mileage.In your 2012 tax file, note your March. 1 beginning mileage and set a reminder to record your Feb 28 ending mileage.
If you are unable to keep a log, at least keep a list of your business destinations throughout the year. That way, you will be able to make a more accurate determination of vehicle expense for your tax return. SARS asks for total mileage, business miles driven as well as personal and commuting miles. Give them an accurate assessment this year. Even if a vehicle is used 100% for business, SARS still wants the total mileage figure.
I will go paperless. Many years ago I realized that whenever a client calls with a question about a Payslip, I never pull a hard copy from the filing cabinet—I bring it up on the computer screen. So I quit making paper copies. Why kill a tree? Proper software enables you to go paperless with all your records including leave administration.
I now retain almost everything on my hard drive. Be very careful though, a computer crash can wipe out everything, so be sure to have a regimented back up routine.