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In this blog post I share 6 Bookkeeping Tips for Adequate Record Keeping and ways to enjoy Guaranteed Business Growth. Being a small business owner or entrepreneur, managing your business should not be an overwhelming task. With so many business tools, software applications and solutions available today, business bookkeeping is becoming the easiest part of running a successful business.
By retaining these business records, you fulfill the requirements of the national Tax Administration Act and satisfy SARS that you comply with all requirements regarding business record keeping.
The Tax Administration Act requires the following business types to keep records:
A registered business that:
Keep your records in the following ways:
You can very easily lose a dispute with SARS simply because of inaccurate record keeping.
Make sure this NEVER happens to you!
Use the following 6 Tips for Adequate Record Keeping to avoid paying penalties…
You can only claim deductions if you have valid proof of your actual deductions or expense.
ALL invoices issued to you can reduce your tax, so if you lose any of them you’ll end up paying more tax than you legally have to.
NB: Speak to a Registered Tax Practitioner for guidance on how to structure your business to remain tax compliant
Make sure you claim ALL your Business deductions you’re entitled to.
Without valid Tax Invoices, you’ll easily overlook certain expenses that you’ve incurred.
NB: Keep a record of EVERY expense, EVEN if you’re not sure it’s tax-deductible.
Determine the amounts you pay towards salaries or wages.
Keep proof such as wages in the form of
If you keep all of this, you can claim all amounts paid for salaries and wages, ESPECIALLY casual wages and wages paid in cash.
Make sure you can fully explain the amounts you declare in your tax returns.
SARS will question the accuracy of your declarations if you’re unable to support them with evidence. And if you can’t prove any deductions you’ve claimed, then SARS will question the validity of ALL your claims!
Ensure you’re in a position to prove your declarations, as this will improve your relationship with SARS, leading to trust and a reduction in unnecessary queries from their side, saving time performing audits.
If you keep adequate and accurate records, your business will run smoothly, and be easier to manage in the long run.
Your business growth is directly linked to your net profits.
When your business profits are calculated for tax purposes, certain business expenses can be claimed to reduce your profit. Reduced profits means reduced taxes.
If adequate record keeping is in place for your business, it is easy to identify claimable expenses.
Once your business financials are drafted and calculated for tax purposes, your business might be audited and proof of these business expenses are to be submitted.
If you cannot provide proof of business expenses in the form of the above records, your claims might be disallowed and this can result in an increased calculated net profit.
Taxation payable on this profit is also then increased. Additional penalties and interests can be added to the calculated net profit due to incorrect provisional estimates submitted.
All these additional taxes, penalties and interests have a direct impact on your business profit for the next financial year. It becomes a viscous circle and will end up depleting all your business profits.
To ensure you enjoy guaranteed business growth, it is vital for your business to implement proper record keeping principles from the start.
When you are ready to take the first step implementing proper record keeping for your business, schedule a FREE discovery session to help you implement solutions for guaranteed business growth. During this session you will also get a feel of what it is to work with a Virtual Accountant and how I help to determine your next steps in your business.
Because I am a heart-centered entrepreneur, passionate about helping other entrepreneurs build profitable online businesses, I created a 6-Step Roadmap to more clients, cash and confidence.
You can grab this free training here.
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