Nothing is born big. Every success story has started small. This is what all businesses that are small today but will surely become big tomorrow should remember. Now, in preparation for that day, it becomes important that certain legal formalities be in order so that the movement upward is smooth and without any hassles. A very important thing that should always be in order is the small business tax return file. There should not be nay ambiguity even five years down the line as far as taxes are concerned. This will facilitate the obtaining of any kind of licenses also in the future.
Financial management is as integral to the success of any business as marketing management. In fact every aspect is inseparable. Accounting or bookkeeping knowledge is a good asset to have but even then it will be impossible for the organization head to sit for hours to do bookkeeping and that is why accounting professionals are needed. Moreover, on the way up; image is also a big issue and that is why the clients should know that the organization is professionally run with a proper accounts and finance department and that it is not a one man army.
There are some very important documents that should always be in order to facilitate the accountant to file small business tax return. They are:
- Annual financial reports which is one of the most important paper for taxation filing.
- A business activity statement (BAS) is also issued by the accountants hired by the organization. The ATO requires all firms to submit the BAS form which is a record of all debits and credits. There is a unique identification number for every transaction.
- Statement of Financial Position which is most commonly referred to as the balance sheet will again also be prepared by the bookkeeper. This is annually prepared statement that list all the current assets and liabilities. A glance at this document is enough for people who know how to study it to clearly state the health of the organization.
- Statement of financial performance also known as the profit and loss statement is also an annual statement although it is also prepared on a quarterly basis too. In this one lists all the revenue minus all the expense which of course will indicate profit or loss if the result is a negative number.
- Cash flow report simply lists all the cash that came in and all the cash that went out.
Every organization whether big or small prepares the above documents periodically and thus is able to calculate and pay taxes as well as formulate future strategies.