internal control

Tax

Finding a Tax Consultant for Small Businesses

Finding a tax consultant can sometimes be a difficult process if you have not had to engage an tax consultant previously. Many small and new businesses make the mistake of completing their own tax returns in the early years. Often a Tax consultant can save tax in areas that individuals would not be aware of — this is money well spent.

There are few things more stressful than not having a good grasp on your finances and feeling unable to approach your tax consultant. So its important to get a good one; here are some tips on choosing an tax consultant for your business:

1) Try and choose a tax consultant before you start your business as they will be able to add value at the early stage.

2) Don’t accept a bad service from your tax consultant. You deserve better. If you change tax consultants your new tax consultant will deal with the handover so if you are getting bad advice or service then change.

3) Ensure your tax consultant works with small business clients and has experience in various sectors.

4) Ask what other services the tax consultant provide – do they provide business advice, can they do accountancy or have they contacts to help grow your business? 

5) Get a fixed fee, paid monthly with unlimited telephone support so you won’t be afraid to call them when you need to them. 

6) Go with your gut feeling, if you don’t think you will be able to get on with the tax consultant after the initial meeting then you probably won’t.

7) Ask for testimonials. A good tax consultant won’t mind if you talk to other clients. 

8)  Make sure your tax consultant keeps in regular contact with your business – not just at year end! They can hep and advise on capital purchases throughout the year.

9) Sometimes its best to have an tax consultant who has a smaller practice as they understand what it’s like running a small business also they won’t be tempted to pass your work onto the junior staff. 

10) Make sure your tax consultant is fully qualified, for example as a Certified Public Accountant (i.e. CPA). Ask them what qualification they hold and check with the qualifying body.

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Accounting

Internal Controls for Small Business – PART 1 – CASH

I’ve worked with many companies from small to large (from the World Bank to the local Church) and one area of accounting that all businesses (particularly the small business) need to be attentive is internal controls. I’m focusing here on small businesses because most larger companies undergo annual audits, in which, internal controls are reviewed/assessed and any shortcomings found are formally presented to management.

First off, If you are a small business owner and the whole concept of internal control is foreign to you, I highly suggest you go to our main site (http://accountantdirectory.com) and find a local accountant who can educate you and/or assist you in establishing proper internal control for your business.

The focus of this topical post is internal controls surrounding cash.  As you may or may not have heard, the old saying is true… ‘Cash is King’. As such there needs to be extra attention to ensuring that your cash is secure. In a one man operation this is done easily, but when additional employees are hired things can a get a bit tricky. The key behind all internal controls is segregation of duties. I think this point can be best explained via a few examples (all small business examples):

  • The individual writing checks (possibly an accounts payable clerk) should NOT be the person signing checks.
  • The monthly bank statement should be received and opened by the business owner
  • The monthly bank statement should be reviewed in detail  (I.e. all cancelled checks should be reviewed ensuring no signature forgeries, large unfamiliar transactions should be investigated)
  • If a material amount of the business’ revenues is from cash receipts, at least two people (custodians) must be handling cash at a time, a cash receipts log should be generated with the written verification of both custodians and a bank deposit slip should be generated by both . Cash deposits per bank statement should be verified with bank deposit slips generated by the cash deposit custodians.

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I hope these examples help you grasp the concept of internal control.

Stay tuned as I continue this discussion of internal control in forthcoming blog posts. 

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