What most people don’t know about starting a business is that they will probably experience an audit. Are you one of these people? You knew about building an online presence and marketing to a target audience, but had no clue about the chances of an audit, right? Well, the chances are pretty high as most individuals and businesses that earn anywhere between $25,000 and $100,000 are the likeliest candidates. The reality is you will have to deal with one at some point soon, and you will need to know how to survive.
The first thing to do is to delay. Although the authorities say you should be ready for an audit at any time, most companies aren’t ready. After all, no one is going to spend time worrying about something that might not happen (fingers crossed!). As a result, you will need more time to get all of your records in order. In truth, you will never have enough time, which is why delaying tactics are useful. Most of the time, the authorities will be happy to give a business more time to get the books in order as long as they have a good excuse.
Cards Over Cash
What’s important is that you have records of all of the transactions for the period they want to investigate. However, it isn’t easy to do it if there are lots of cash transactions. A card transaction, on the other hand, is a different argument. Industry experts like NFC Direct believe card transactions are brilliant organisational tools, and it’s easy to see why. Once the transaction is over and the receipt printed, the cashier just has to put the receipt in the till for safe keeping. When the taxman turns up, it is much easier to detail all of the firm’s transactions with the receipts. Cash is notoriously hard to follow and gives the taxman cause for concern.
Know Your Rights
It ‘s hard to obtain a deep understanding of the law because the law is complicated. However, there is no need for an in-depth knowledge of the law because you’re not a lawyer. Instead, just read up on the essential points that will help you during the audit. For example, you are allowed to cut the meeting short if you require help or if you need to get your records in order. A little bit of knowledge can go a long way in these circumstances, so obtain as much as possible.
Not too many businesses come out of an audit without a compromise. Although it isn’t fair, the authorities like to impose their power because they don’t want to seem incompetent. And, an audit which showed there were no means for their services would be incompetent. As a result, it’s a good idea to manage your expectations. The odds are high they will find some irregularities, but it isn’t the end of the world. All you have to do is take it on the chin and negotiate.
Audits aren’t nice, but you can survive them with these simple tips.