Business owners who have been in the industry for a very long time can attest to the fact that tax planning and management is a vital part of a solid business financial plan. Unfortunately, first-time entrepreneurs are yet to realize this. Most of them follow a reactive approach to tax management instead of taking a proactive tax planning scheme. And so the recipe for disaster begins.
If you are operating your own enterprise as well as your own tax compliance requirements, do remember that tax planning should be a priority. Here are some tax management basics to give you a good headstart:
1. Automate your bookkeeping.
Manually working out your receipts and invoices is not always the best to go, especially for growing businesses. As your business expands, so does your bookkeeping requirements. if you insist on manual bookkeeping methods, your books might be subject for manual data entry errors and the like. And we haven’t even touched base on the extra time it would take as compared to automated bookkeeping.
2. Do tax preparations in advance.
Prepare your tax documents way before the deadline. Doing so will give you enough time to check the accuracy of your financial data. So in case you find errors, you will still have enough time to sort it out. More than anything else, advanced preparations will also keep you from panicking and missing out on possible tax deductions.
3. Stay in the loop.
Every now and then, the Canada Revenue Agency would announce amendments in the country’s current taxation laws and policies. Being in-the-know keeps you updated on the change of policies. This is specifically helpful if you are doing a lot of hands-on work on your business taxes.
4. Collaborate with a tax accountant.
Tax accounting is a complex process that requires experience and expertise. To make sure you are right on track, it would be a good idea to talk to a tax accountant. An expert on Canadian taxes can tell you exactly how to handle your tax compliance requirements while giving you advice on the best ways to get tax deductions.
Advanced tax planning and management can go a long way. By drafting and following a viable tax planning scheme, you can save more on your next tax bill without raising red flags for the CRA.
Need help in sorting out your tax compliance requirements? Consult with our experts at D&V Philippines today!