To get across a border you must produce a passport. To maintain a limited company, your finance function has to produce the necessary financial reports and paperwork for the tax authorities.
To keep a business legally trading, you must have systems in place to produce the necessary tax reports on time, accurately and in legally correct content and format:
- Annual returns to CRO – full set of financial statements and relevant forms,
- If you do not have an audit exemption, auditors report,
- VAT returns,
- PAYE / PRSI reporting and any other employment tax returns,
- Possibly other sector specific financial reports required for compliance purposes depending on your sector.
You must have a cost effective book keeping system in place to capture all transactions – all costs and all revenues, so that it is easy to convert this information into the legally required formats to satisfy the tax authorities.
If you are at the early stage of your business sort this out as soon as possible.
Most small businesses outsource end of year CRO reporting. These tax returns need to be signed off by a registered professional accountant. Many SMEs also fully outsource book keeping until they are big enough to pay an internal bookkeeper.
If you choose to outsource these functions try to find an accountant who deals with other small businesses like yours, ideally in your sector and get reliable word of mouth references from companies in a similar situation to yours.
A good accountant who understands your sector can add huge value in the form of reducing your tax bill, and will also make sure you are compliant with regard to VAT. VAT is a highly complex issue in many sectors such as food and it is critical to make sure you are charging the correct VAT rate on all of your products and services.
Don’t use your brother in law just because he happens to be an accountant, only to discover too late that he has no experience of small business and is a highly specialized tax consultant advising off shore companies on how to minimize their tax bill.
Make sure you are crystal clear what your external accountant is going to do for you – otherwise you may discover with a nasty shock that your assumption that they were doing the VAT returns was wrong and there is a fine for late filing in the post.
Get a clear shopping list of tasks and then ask the accountant to give you a clear cost quotation. It is worth shopping around but quality and timeliness of service is critical.
This article is written and reproduced with the kind permission by Moira Creedon of Artemis Consulting