Many companies fear the tax authorities and lawyers when they talk about accounting and the control of their affairs by the tax administration, especially those that are not assisted by an accountant or a legal department. The accounting operations and the recording of entries in the general ledger must follow several rules in order to be in compliance with the law. Keeping good books is difficult for any taxpayer. For companies, checking the accounts digit by digit, correcting them in the event of an error detected and preparing the main financial statements which are the balance sheet and the income statement can become real puzzles. Companies which have not paid the taxes to which they were subject, which did not respect a legal procedure or a deadline for presentation of documents can cause themselves big problems with the tax administration . To avoid the dreaded recourse to a lawyer, it is better to have your accounts checked .
Self-checking of accounts, a risky operation
An accounting error can have very serious consequences
If you are a micro-entrepreneur, the manager of a VSE or an SME, you probably have not budgeted for the review of your accounts by a professional expert in accounting at the end of the financial year. You also do not have the budget available to provide you with the services of a lawyer if the tax authorities detect an error in your accounts, ask you questions about the amount of your turnover, VAT or another tax. for which you are indebted. If the tax authorities check your activity and find errors in your accounting, this error can have serious consequences:
- economical, because you will have to pay a fine, the amount of which will vary according to the number of errors and their seriousness;
- organizational, because your business can be paralyzed for a while and you will have to dedicate a lot of time to auditing your accounts to be in compliance with the law;
- commercial, because such sanctions after a tax audit will affect your brand image and your credibility with your customers, suppliers, public administrations and banking entities when applying for a loan.
Rigor and method, essential qualities for auditing accounts
Since you have decided to run your own business, you have decided to be the auditor of your accounts. If you want to keep lawyers out of your business, you will need to be rigorous and methodical. Starting with your accounting balance . To properly carry out your balance sheet and insert all the elements in the place that corresponds to them, follow the steps to follow:
- Make a complete inventory of all your goods in stock or your current services.
- Remove charges and prepaid income (cut-off).
- Take into account the charges and goods you will have to pay in the next exercise.
- Calculate fixed assets, depreciation and provisions.
- Review all your accounts receivable and payable without forgetting the sub accounts, as well as all other accounts.
- Make sure that out-of-the-ordinary cash movements , large variations in total equity and exceptional transactions are well explained in the appendix with the addition of accounting documents for their justification.
- Compile your working file by gathering all the necessary accounting documents.
- Choose the right presentation template for your annual accounts, depending on the size and activity of your business.
Accounting verification by a chartered accountant
The income statement and the balance sheet are annual documents which reflect the financial balance and activity of companies. Like all procedures carried out in accounting , these documents must be drawn up with the greatest respect for the codes in place and legal obligations. The chartered accountant is the professional best able to carry out your balance sheet for you, or to verify your accounts before they are presented to the tax authorities. He will immediately know how to perform the necessary calculations, identify the elements to be taken into account and place them in the place that corresponds to them in the table of assets and liabilities. For example, he will draw your attention to:
- cash flow;
- the receivables ;
- the equity ;
- the debts;
Entrepreneurs who wish to use a chartered accountant must take the time to solicit several professionals to compare their rates and the services included in the proposed assignment. The nature of the mission is to be defined between the two parties. It may concern only the verification of accounts, the distribution of tasks or the assumption of responsibility for all accounting operations by the expert. To be complete, a good estimate must include several information concerning the mission (duration, nature, tasks entrusted to professionals, fees ), but also on the costs in the event of termination of the unilateral contract (termination indemnities) and the length of the notice.
More and more accountants are offering their services online. This channel is very convenient for all those involved, because it saves them precious time, reduces the costs of document management and tax operations. A good accountant will be able to give you valuable advice or relevant information to optimize the organization of your business and your accounting.
Entrust your accounting to an accounting software
Another option to consider for regular monitoring of your accounts throughout the financial year: accounting software. Online accounting tools are intuitive solutions, accessible from any computer, which allow users to automate all of the company’s accounting operations . A company that adopts an accounting solution can issue invoices and quotes, consult its accounts in real time, declare its VAT and produce all of its essential financial statements when closing an accounting year in accordance with the law. The machine resumes data entry in the software to automatically prepare the balance sheet and the income statement.
The performance of an accounting software depends above all on the number of functions in the menu and the ergonomics of the interface. Billing and accounting software is not mandatory, but VAT-liable businesses that use this type of online solution must opt for certified software . The certification facilitates the verification of accounting operations in the event of a tax audit, the transparency of the information processed by the software and the management of tax procedures by the company.
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