What You Need to Know to Keep Your Accounting Compliant

Tax season isn’t over yet! 2019 still has some deadlines to hit, so make sure you know how to keep your accounting compliant.

From small family-run businesses to large multinational corporations, everyone needs to follow the same sets of rules. This also means that within every level of business, the tax and finance professionals involved are all expected to understand and apply rules and regulations that can be confusing and complicated.

Global companies need to ensure strict compliance, but precision is increasingly complicated due to the increase of digitization within revenue authorities, as well as constantly evolving regulatory and legislative changes.

On top of those potential roadblocks, staying on top of local and national tax developments can feel impossible, especially while trying to balance those needs with meeting financial demands that need to remain transparent.

Due to the unrestricted view of business finances an accountant is trusted to oversee, it is vital that the information they present for tax purposes is honest and reliable. Get to know all of the financial requirements for your business now.

Here are some things you need to know to keep your accounting compliant:

GDPR Rules

If your company is based in or has connections with Europe, you need to know this first set of rules. GDPR, or General Data Protection Regulations, are now enforceable. Designed to update and modernize personal information laws, the GDPR is Europe’s new framework for privacy laws. You can be prepared for compliance by keeping up-to-date with the landscape and remaining vigilant about how these laws may change with time.

• GDPR covers both personal and sensitive personal data. Due to the nature of information an accounting firm has access to, this means adhering exactly to these new rules
• Any company covered by the GDPR is accountable for the handling of personal information. This can mean the implementation of comprehensive data protection policies, and making sure to have documents to hand about how data is processed within your business
• It’s a good idea to keep the full text of GDPR handy, so that you can refer to its 99 articles which set out the rights of individuals as well as the obligations that have been placed on organizations that need to stay compliant
• Categories that may need to be included for tax information include: special category data, personal data transmission policy, and personal data deletion policy
• If your firm employs more than 250 people, you will need to have the correct documentation about the reasons for collecting and processing their information, as well as how long it is going to be held, and what kind of security measures are in place to protect that information
• Take advantage of the Guide to the General Data Protection Regulation, which sets out all of its different rights and principles
• Regulators can fine businesses that don’t comply, so make sure this is an area that retains your focus

IRS Compliance

American businesses of all sizes have a tax obligation to the Internal Revenue Service (IRS), and must submit their records. These include payroll taxes and details about federal income and social security tax withheld from employee paychecks, and quarterly records of all taxable earnings.

• Accountants who prepare and submit forms to the IRS must comply with IRS reporting requirements
• The IRS mandates that all reported information must be truthful and that all income be reported
• Employers must ensure the submission of accurate Social Security information on all employees and contractors
• Companies may not divert or withhold income to avoid compliance
• The IRS can help your firm to comply with tax laws and obligations on time
• Publications found here give links to taxpayer compliance research

Storage of financial records

The Sarbanes-Oxley Act, or “Public Company Accounting Reform and Investor Protection Act” (SOX) is a US-based federal law that includes requirements for all American public accounting firms. Created in 2002, it aims to protect companies, shareholders, and individuals from fraudulent accounting practices.

• Under this act, accounting and financial records must be accurate and the information must be stored in a way that is correct and easily accessible
• If fraud is suspected, forms will be reviewed by regulating bodies as well as the Securities and Exchange Commission (SEC)
• Accountants are responsible for ensuring adherence to these rules and that the data required and recorded is stored for the appropriate amount of time

Be prepared for an audit

Compliance checklists will help when it comes to preparing for an audit. Keep this checklist handy and ensure each item it contains is at easily accessible in case of an audit.

• Companies under audit are inspected for legal and regulatory compliance, so it remains crucial to keep in line with the rules and regulations laid out above
• Auditors can create their own checklists to confirm that all of the procedures covered in the SEC disclosure requirements have been fulfilled
• Accounting practices and treatments will be examined during an audit
• Financial statement checklists check against accepted accounting practices, such as dealing with transactions and the amounts that need to be present in the statements
• If it is mandatory for your company to observe specific compliance rules for things like environmental protection or employee compensations, it is critical that you can show the evidence that you have followed these regulations to the letter

Making Tax Digital for VAT

Is part or all of your business UK-based? You need to stay informed about making tax digital for VAT. This law came into effect on April 1 2019, and means that VAT (business tax) data must be submitted to HMRC digitally after this date.

• Manual records to be kept and submitted are a thing of the past with this new set of guidelines
• VAT returns sent via software that supports Making Tax Digital is the only thing HMRC will accept
• Compulsory technology requirements means researching and choosing the best accounting software for your firm

Automate your accounts receivable to ensure strict and easy compliance to the tax rules and regulations in your area. Invoice Tracker has a free, 30-day trial, and is GDPR and EU-US privacy shield compliant. Act now to improve cash flow for your business and get paid fast.