5 Ways to Avoid Prepare for an Audit

Figuring out a way to avoid an audit may sound good, but the eventual outcome isn’t really in your control. Sure, there may be ways to increase your chances of not being audited, but the fact is that anyone can be audited, randomly, at any time.

Don’t avoid an audit; prepare for it. Here are five tips and recommendations to better prepare you for a potential audit:

#1: Don’t Panic: Your Issue may be Very Easy to Solve

An audit can send shivers up our bodies or make us stop in our tracks. That’s certainly understandable, but the reality is that many audits aren’t as scary as you might think.

Did you know the IRS sends more than 1 million letters each year to taxpayers who didn’t sign their returns? Other letters may require a simple response to a specific issue, such as making a payment, account changes or providing more information.

These are harmless inquiries that yield easy resolutions you can provide on your own.

#2: Keep Good Records

Whether it’s your tax returns, source documents, or checks received and cancelled, you must keep copies of all tax records. Credit card statements simply aren’t enough because you may be asked to provide more documentation.

Keep your receipts on file; Sound Business Services (SBS) can provide you powerful solutions to keep up with your receipts and reconcile them with credit card transactions and bank data. It’s a process where we tap into amazing technology and apps, and use our knowledge and experience, to help you keep good books and records up to date, while also providing actionable data and insights.

#3: Don’t Be Duped by Fake IRS Emails or Calls

The IRS will only contact you directly by mail – not by email or through a phone call. Imposters will often pose as IRS staff over the phone and demand money from you to fix a “supposedly” dire situation or need. Others will email you and include a link that can lead to identity theft or ransomware. Know that the IRS will neither send you this kind of link nor call you over the phone, demanding something urgently.

When you do reach out to the IRS over the phone, make sure you take down the agent’s ID number and name, log the time you spoke to the agent, and jot down any important points he or she covered in your conversation.

#4: Don’t Mix Business and Personal Expenses

Your business and personal expenses need to be clearly defined. With meals and entertainment expenses, it’s tempting to try to claim more than may make sense – and that may trigger serious red flags. If your business meals are legitimate and not personal in nature, they’re acceptable; however, you must have receipts and appointment information to prove that.

#5: Be Honest

Honesty is extremely important to me. It’s something I look for in my team and my clients, and especially important when it comes to taxes and the IRS.

Being dishonest opens you up to an audit, and lying to the IRS will only further hurt matters. We all make mistakes, but make sure you are forthright with everything you do, or you could be facing painful consequences.

Reach Out to Us Any Time

Of course, SBS is here to help make sure you are prepared for an audit. We know how sensitive this subject is, and we will guide and help you through the entire process.

Contact us today to get started, or to learn more about how we can help.

How to Work on Your Business Instead of Working in Your Business

As a business owner, are you spending too much time on back-office operations and internal matters instead of finding new customers/clients?

Of course, you want to grow, but you may be spending more time working in your business instead of on your business – and you’re not alone. Most of us do. Yet, there are several key strategies you can implement to ease your pain. Here are my recommendations:

Hire good people. No matter how great you are, or how amazing your product or service is, your business is only as good as the people who represent it. If your staff isn’t passionate about their job, willing to learn or hard workers, you will constantly have to babysit, run around in all different directions, fix mistakes and put out fires.

Cultivate Healthy Relationships. As you may know, I am big on trust. If your staff or clients don’t completely trust you, that’s a major problem. Earning their trust and respect requires building great relationships where you get to know people, develop a rapport and get the most out of the relationship.

This is definitely a process, but remember that your team and clients will only believe in you and your product or service if they see you leading by example and caring for them. For example, if you expect them to show up on time, you should, too. If you want them to work hard and represent your business a certain way, you must let them know how to do this. If you want them to be passionate about your company and go to bat for you, you better show you care and reward them along the way for their hard work. This doesn’t always have to be monetary; a genuine pat on the back, giving them more responsibility and challenging work, or a promotion also works.

Systems, processes and procedures. It’s hard to actually step back and find time to work on processes and procedures, but it’s a must. While you’re doing that, you also have to ask if there are ways for you to keep better track of things, be more efficient and effective, and limit mistakes. Of course there are! There are solutions all around you.

Through the cloud, going paperless, automation, technology, and tapping into the power of QuickBooks Online (QBO) and the apps that integrate with QBO, there are so many ways for you to work more efficiently and effectively – and save lots of time and money in the process. A great bookkeeper can guide you through these solutions and get you the powerful results you deserve. Sound Business Services can help you implement all of these strategies and be there every step of the way so that you can focus doing what you do best – running your business.

Be a great leader. This means being a visionary. You have to be able to see the bigger picture, where you determine what it is that you want to accomplish, and how to get there, now and into the future. Then, you must be able to build the right team around you to make that vision come true and reach those goals.

The burden doesn’t all fall on you. In fact, if you try to do too much, you will never have enough time to work on your business! That means that you must delegate some of the responsibilities to your team who can help you lead a great business. Impart the knowledge, training and experience they need to succeed so that they can do their jobs to your satisfaction.

These strategies will, hopefully, help you focus on working on your business. Ultimately, your team needs to be happy to be there and willing to do what it takes to keep your clients happy and successful.

We are Here to Help!

As I small business owner, I know that running a business takes a massive effort, and it’s often hard to find time to actually work on our businesses. But, you can’t lead a business without getting out of the day to day.

Through a lot of self-reflection and strategy, I am grateful to say that SBS has been able to grow. It’s a constant struggle, but if you do things such as setting aside specific time on your calendar each day to work on your business, and practicing some of the tips above, it’s attainable.

Of course, we are always here to help you find ways to take your business to the next level. Feel free to contact us today, and we would also love to hear about how you’ve been able to work on your business.