31st March is the day most business owners and employees alike need to prepare for. As an individual working employee you have to ensure your investment and tax papers are in place before this d-day. Business owners too have to close their books of accounts and have everything ready for the 31st March closing. Most times, employers and self-employed professionals end up struggling to complete this paper work in time. Here’s what you can do to avoid the last minute rush for the coming Financial year,
1. Don’t Wait Till The Last Moment
Most companies have monthly accounting formats in order. The challenge comes in when you are an SME owner or self-employed professional. Self-employed professionals do not necessarily have to keep their monthly accounts in check because they do not need to report it or file it besides at the end of the year. This is where the problem comes in. If you run a small business or are self-employed, waiting till the end day will make thing tough. Hire your accountant and record every transaction as it happens. At the end of the financial year, you won’t have as much running around to do.
2. Get Your Receipts In Order
If you, as a self-employed professional or small business owner have made donations at all to NGO’s or causes, save the receipts in a file. Show them to your accountant because it may attract some tax savings. Furthermore, if you have bought equipment or additional things to help you run the business efficiently, ensure you record these purchases in the accounts. All your expense records and income receipts should be saved carefully throughout the year for better accounting. If you follow a monthly accounting system, your financial year-end filing will be a cake walk.
3. Clear Payments
As a small business owner, your liabilities will affect your balance statement. Clear payments to vendors or hired staff much before the last day. Set up a proper payment system if you haven’t already.
4. Take Care of Your Taxes
If you run a small business that provides a service, you may have to pay a Service tax on a quarterly basis if you cross a certain limit. This is subject also to the kind of service you are providing. Ensure your accountant has a copy of all the bills you send out to calculate whether you are liable to pay any taxes. Clear these taxes well on time and do not wait till the end day. By defaulting in this stage, you will end up facing an additional charge on the taxed amount. Sometimes, a self-employed professional may need to pay a tax on the total income if it crosses a certain limit – subject to the kind of service provided. Your accountant would be your best guide here in order to calculate whether you have to pay a tax or not.
5. Record Everything
Many self-employed professionals or small business owners lose out by not recording the small expenses. If you are a professional, keeping your books of accounts well is a big step toward ensuring better financial management. As a self-employed professional use a separate bank account and record book to note how much money you make and how much you spend on business activities. This will help you file your returns and accounts at the end of the year.