Question

Develop a procedure to ensure a small business meets its financial reporting requirements.

Answer 1

For any business it is important that a proper financial reporting is in place to meet the tax requirements as well meet the financial goals of the enterprise as well as monitor the health of the business.

The following are the procedures to ensure financial reporting :

1. First and foremost a business should create a separate business bank account : your business bank account should be separated from the personal account, this would ensure that all the income and expenses are in one place and proper filing for taxation purposes can be done.

2. A proper budget should be made: a budget ensures that all the current expenses are met and a future estimation of costs is also made to ensure that the business does not end up overspending and by keeping expenses to the minimum a business can also create some additional income.

3. The business should have a proper accounting system in place : the business should have a proper accounting system, so that proper record of the daily translations are made and it helps to review the accounts properly and helps to make filing got taxation ,GST easy.

4. The business should have good credit and debit policies: the business should ensure that there is a proper cash flow and the business keeps the levels of debt minimum. The business shoudl also collect it's dues on time.

There should be proper procedures for delivering the goods and services and invoicing the payments.