Reducing overheads and finding a creative way to generate other types of collateral income to their main activity will help businesses and individuals cope with 2021.
After a year 2020 extremely complicated by the COVID-19 pandemic, the beginning of 2021 comes with a new opportunity for companies to reactivate their operations, and the accounting area of organizations takes great importance to achieve this. For this reason, starting this new year with sound accounting should be a priority for the country’s entrepreneurs and taxpayers.
According to Carlos Vargas Alencastre, CEO of TPC Group a firm specializing in Transfer PriceStudies, and an expert in tax and accounting issues, a healthy accounting is one that has all the books and records required, has Financial Statements and complies with the tax returns and payments to which the company is obliged.
“It is important to start and maintain sound accounting throughout 2021, as this will help us improve financial decision-making and give us an overview of how the company is doing. On the side of physical or natural taxpayers, maintaining a good accounting allows them to better face some requirement on the part of this in some action to control the tax administration of the country,” explained Vargas Alencastre.
How to start the year with healthy accounting?
The CEO of TPC Group commented that a taxpayer may have indications that their accounting is un healthy when payments and returns are being defaulted, as well as when their taxes are being determined on an incorrect basis and generating penalties.
To detect and correct this situation, and maintain a healthy accounting throughout the year, Vargas Alencastre gave 5 recommendations that both physical or natural and legal taxpayers can apply. These are:
- Have a specialist; that is, with an accountant who knows the accounting management of the company.
- The accounting specialist must have up-to-date and specific knowledge of the taxes that the company must pay.
- Have the records of both expenses and sales, in the forms established in the tax legislation of the country.
- Make tax returns and payments within the deadlines set by the tax administration.
- Have periodic financial statements of the company.
Vargas Alencastre stated that by taking advantage of this beginning of 2021, natural and legal persons should take additional considerations such as reducing their overheads and finding a creative way to generate other types of collateral income to their main activity.
“These two elements will help companies and professionals cope with the difficult stage that most companies are going through today. This must always be done without leaving aside the component of formality and always keeping the north of accounting healthy,” vargas Alencastre concluded.