If you operate a small business, you have a great deal on your mind most days. You may be ultimately responsible for much of the day-to-day operations of your business, and you may be the principle point of contact with many or all of your customers. But you may also have some employees, so staffing issues, ranging from hiring and pay to training and other management activities can also occupy your day.
And chances are you are likely responsible for much of the financial operation of your business. While it is a good thing for the owner/manager/proprietor to be cognizant of all the important financial details of their operation, there is always the risk of becoming bogged down in so much minutia that you are distracted from the actual running of your business.
Few areas are more fraught with peril for the owner of a small business than taxes, and few items can be more distracting than the notice of a tax audit. A tax audit may be routine, and no cause for concern, but unless you regularly work with the Internal Revenue Service, it can be unsettling and leave you unduly concerned about your financial and tax records for the period under audit. Are they correct?
The importance of detailed, organized and complete recordkeeping cannot be overstated. Assuming your books are in order and you have been paying your correct taxes, an audit may be little more than your collecting your records and demonstrating to the IRS that they are accurate.
If you have never thought about the possibility of an audit and do not have the most precise organization to maintain your financial and tax records, you may want to discuss the topic with a tax attorney. They can review your systems and point out what you need to keep and how your need to keep it.
As they say, an ounce of prevention is worth a pound of cure. Especially if prevents problems with IRS tax audits.