By Morgan International Staff Writers
Unlike any individual, large corporations and businesses need to maintain tax records so that they never get into any hassle. There are many factors that contribute towards tax hiccups and companies always want to avoid them. Following are the top 9 mistakes that are to be avoided to overcome the costly tax returns:
- Retention failure
Quality of people is always correlated to the work they perform. For corporations one of the main reasons for large tax imposition is the fact that they fail to retain the top level staff. Good tax and accounting professionals are necessary and should always be retained no matter what.
- Botch of financial files to personal devices
Financial files are very sensitive in nature and corporations know about this fact. However at times some top level employees use their personal devices to save such files. Data security is a menace and by applying stricter file policies the breach and the related tax can be avoided with ease.
- Inefficient use of excel
This also leads to disaster. Regular sharing of excel and accounting files might end up in deleting the custom made excel formulae. If the creator does not work with the company then hours have to be spent in reconciling vivacious tax information.
- Figure estimation outside of the system
Companies spend millions of dollars in tax systems. However the tax department might calculate the figures and returns outside of this system just to ease the workload. This is a malicious mistake that leaves no audit trail or log for any auditor to figure out what happened.
- Wi-Fi Security breach
Using secured Wi-Fi networks is once again a menace that should be avoided. Such devices are prone to attacks by the intruders if the Wi-Fi is public or keyless system is being accessed. Proper Wi-Fi security and avoiding public networks can put an end to this issue.
- Closing the books impulsively
Closing the year books impulsively not only leave out important process data but can also lead to mismatched balance sheets at the end. This issue has been faced by enterprises all over the world that ultimately leads to surprising fines and future number skew.
- Unawareness of the top management
It is a dilemma that the top management of most organizations does not put their time and effort in going through the basic level tax processing. The result is that they never invest in top quality tools and people putting entire process at risk.
- Misunderstanding city level tax regulations
In accounting there is no shortage of laws. Tax departments often miss the important information about the city level regulations that can result in huge tax exemptions. The effect can be seen at the year end when huge returns are filed which could have been avoided easily.
- Tax tool investment elusion
Companies often make no to trivial investment in tax and accounting systems. Free or half functioning tools can never give the desired results and it’s a fact. Proper accounting and financial controls can only be implemented if tools are paid for and are up to the mark.