Tax season comes only once in a year, but it is a big deal for every business owner. Many companies leave it to the last minute and this procrastination costs a lot because books closed in a haste tend to have errors; both procedural and regulation wise. Every year, CPAs and accounting firms make the same kind of mistakes that are costing businesses billions.
Let’s check the most common mistakes that are costing a lot of money on a yearly basis and result in fines and penalties in the long term.
1. Closing the Books Early:
Accountants are busy people and when it comes to the financial year end, it is understandable that they are swarmed with work. But that does not mean they can get away with closing the books early before all the data for a business is put in place. Books are meant to be compiled and balanced, it is the cardinal rule of the accounting world. When a book is closed in a jiffy, there are going to be mistakes. So, it is important to devote proper time and resources to ensure proper book close with all the boxes ticked.
2. Incorrect Adherence and Application of Regulations:
Every business must comply with many rules and regulations on the city and state level because the rules and regulations change from time to time. If a key tax regulation is missed then that results in mistake in tax calculations. In most cases, a missed regulation means missed benefits of local tax incentives. Sometimes, this mistake can also lead to heavy fine during audit.
3. Making a Mistake While Entering Data:
Entering incorrect data is a big NO. A single mistake can cost millions and there is no counting how much it will cost for multiple mistakes. So, be accurate while entering your data.
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