Many people start to wind down a little at this time of year. Calls to customers start to tail off, marketing spend for business-to-business companies slows down, and everybody starts to save their energy for buying a wrapping stuff for the kids. For the poor souls in finance and accounting, this is just the calm before the storm. Financial years come to an end with a flurry of activity, and worse yet, tax season in the US starts to cause pangs of remorse. "Why did I not keep my paperwork more organized through the year?". "What are all these travel expense receipts?". "Can I hide on a small Caribbean island?".
Well, 2010 is almost done. Feel free to spend much of the end of December and all of January running around, finding what you need for your annual reports and IRS filings. But ask yourself, "do I want to be doing this again in twelve months time?". Especially as the new health care reform bill has an impact on the tax reporting of transactions (in the same way that the housing assistance support bill did several years ago), making the accounts payable team miserable. Yes, filing 1099 forms for every vendor that you spend more than $600 with (not just the unincorporated ones) in the course of the year sounds like running a report or two, then filling in the paperwork - not fun, but not world ending. But wouldn't it be better if you could kill two birds with one stone, fixing your messed up paper and Excel accounts payable and travel expenses processes, and ensure you can meet the 1099 reporting needs more easily?
It seems to be true that despite the hype of the burden on small business, a big chunk of the responsibility for patching up the leaky tax collection problem goes back to big business. The merchant banks, credit card companies, whichever organization handles an electronic transaction, becomes responsible for reporting these transactions. The tax code already demands this, and the requirement appears to have been extended. So, I've been complaining this week that electronic transactions are too costly for small business. Maybe that cost starts to be put into context when I consider the reporting costs in the future if I write a lot of large checks.
Its time to get ahead and start streamlining those accounts payable processes. Its really not going to be that hard, compared with the year end chaos that ensues anyway. And it could make 2011 a more restful and peaceful year, for accounts payable at least.
Remember: I know nothing about tax law or any other regulations affecting your business. So check with a professional before doing, or not doing anything.
A post from the Improving It blog
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