Ask any accountant what they do; the response might vary from “tax agents” to “independent auditor.” Individuals involved in or part of the accounting function on a personal or organizational level often perform a myriad of roles, which makes their job misunderstood and often confusing for the uninitiated. However, the significance of the role of professional accounting and tax services providers cannot be overly overemphasized on a personal and professional level. These accounting professionals are at the forefront of safeguarding the integrity of any organization at any level.
In any organization, the management can be responsible for producing financial information. But it’s the accounting professional’s onus to defend the financial reporting regarding its accuracy, quality, and the source from which the numbers have been produced. Any slip-up can do irreparable damage to the organization’s reputation and business in general. For this reason, we often see organizations partnering with professional accounting and tax services providers to achieve compliance and reduce risk in their financial reporting. In this blog, we will take a closer look at how these accounting and tax service providers act as custodians for an organization’s financial data and help them meet the compliance guidelines at all levels while always minimizing risk. So, let’s begin by understanding accounting and tax compliance.
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Understanding Accounting and Tax Compliance
The global trend towards stringent accounting and tax compliance has made mitigating accounting and tax compliance risk atop the priority list of modern businesses. In simple terms, accounting and tax compliance essentially refers to adhering to the government’s tax and accounting laws and regulations. Whether an individual or an organization, you must adhere to and understand the basics of compliance to avoid penalties, fines, and sometimes legal action.
As an organization, four primary accounting and tax compliance areas need active management. They are –
4 Primary Accounting and Tax Compliance Areas Needs Active Management
Tax Registrations:
A business must register for tax purposes before starting its operation in that specific region. According to a recent study, 86% of countries require tax registrations. There are different aspects of tax registrations that you need to take care of as an organization before setting up your business in any new geography.
Tax Filings:
Only 35% of tax jurisdictions across the globe allow businesses to postpone their tax filings, given that they provide written notice. Under such stringent guidelines, managing multiple cross-border tax filings can be daunting. However, with the help of professional accounting and tax services, you can seamlessly handle numerous deadlines, submission modes, and forms that need to be considered.
Tax Reporting:
The number of tax authorities requesting near-real-time tax reporting is constantly on the rise, with as much as 45% requesting it in 2021. Several countries have started introducing e-invoicing in 2023, and many others are planning to adopt the same. This will require organizations to have the necessary tools in place to manage tax authorities’ requests and produce the required reports as and when needed. The professional accounting and tax services providers are well versed with the changing tax ecosystem and help you comply with the changing ecosystem without your daily operations getting affected.
Tax Payments:
43% of tax authorities worldwide require businesses to furnish tax payments from a local bank account. If you are on top of your tax payment game, you can easily save valuable time and consequently attract penalties for failure to comply with local tax authorities. Having a professional accounting partner by your side and help you tackle it all with absolute ease.
Strategies for Achieving Compliance and Reducing Risk
For any business, compliance with tax and accounting regulations is crucial for its successful operation and, more importantly, to avoid potential legal issues. Being non-compliant can have severe consequences, from financial to reputational damage to legal penalties, and non-compliance with tax authorities and laws can seriously harm your business.
Thus, here we have listed some effective strategies that can help you achieve compliance and reduce tax and accounting risks:
Maintain Accurate Records:
As a business, you must always keep detailed and accurate records of all your financial transactions, including bank statements, receipts, invoices, and other financial documents. Maintaining proper books will help you identify any potential issues beforehand and address them even before it becomes problematic for the business.
Know the Tax Laws and Regulations:
As a business owner, you will have a plethora of things going on in your head; however, keeping up with tax laws and regulations is critical and a must. You must ensure that you have a healthy knowledge of filing deadlines, relevant tax codes, and reporting requirements. You must always consult a professional tax or accounting expert should you have any doubts or issues regarding the complex tax rules.
Use Accounting Software:
Technology has always been a close aid of accounting professionals. It would be best if you had all the latest and relevant accounting software to ease the record-keeping process and help ensure accuracy. You can use these software’s to automate the generation of your financial reports, and data entry, and to provide near-real-time visibility into your financial records to the tax authorities.
Carry Regular Audits:
Audits are excellent means to identify and address any potential tax or accounting risk and ensure absolute compliance with the tax authorities. You can do it through internal auditors or can have professional tax auditors help you with a comprehensive external review.
Get Professional Accounting and Tax Services:
Seeking external consultation with a professional accounting and tax services provider can be instrumental in significantly minimizing and managing tax and accounting risks. These professional services help you identify potential risks and help you with the necessary guidance on the compliance requirements.
Conclusion
Overall, professional accounting and tax services offer considerable benefits to individuals and organizations. From providing accurate financial reporting to saving time and cost to reducing the risk of errors and penalties to accessing experts, the list of benefits offered by these services is immense. As a business and individual, if you are looking to achieve your financial goals with absolute ease and ensure compliance with accounting regulations and tax laws, we recommend you get a professional service right now.
If you are having a tough time identifying the proper professional account and tax service for your business, you can always right to us at: marketing@datamaticsbpm.com, and we will have our tax and accounting reach out to you with a suitable suite of services.
