The end of tax season is quickly approaching, and many individuals and businesses may feel that they can relax for a bit once they have filed their documents. However, companies that want to see the most from their returns should act now to enact changes that will generate positive returns for next tax season.
Technology has allowed companies to complete financial information at increasingly fast rates. Important data can be stored in a central location and retrieved quickly when needed. This makes it easier to calculate earnings and accurately report them, which helps organizations avoid legal trouble. The Denver Business Journal reports that the IRS is targeting businesses for underreporting their earnings. Failure to comply with federal laws could result in costly fines or prison sentences, so it is essential that companies implement plans for tracking revenue throughout the year. Accounting audits could ensure that all earnings are accurately recorded.
Accounting software that allows firms to track their income can also be used to monitor expenses. Certain costs provide write-offs when filing taxes, but the main benefit of tracking expenses is being able to see exactly how funds are being spent. Understanding cost centers helps any organization improve efficiency and maintain control of profit margins. Having expense tracking systems in place makes it easier to conduct internal audits as relevant information is available when needed.
Creating value through audits
Audits may be required during the upcoming year as the sequestration brought a number of changes to payroll taxes. Companies in every industry may need to review their compensation structures to ensure they are compliant with federal laws. This process requires careful control of information as it could lead to violations of employee privacy if precautions are not taken. Personal information should not be accessible during an audit or other review procedures, so businesses need to ensure that their files are accurately protected.
Data security is a growing concern as more organizations turn to cloud-based servers. These platforms let employees share files and can improve productivity, but proper security is needed to safeguard sensitive information. An internal audit could identify potential threats, letting firms adjust their practices before data is lost.
Successful audits will help building management companies improve their operations. The practice can be applied to areas outside of the financial department as well. For example, a risk assessment audit can be used to monitor threats to persons or property. By taking steps to eliminate these risks, companies can more readily protect their investments.