Managing the Legality of Your Business Finances

Starting your own business is complicated enough without the mass of red tape that the government throws at companies in order to ensure that they comply with the litany of laws laid down over employment, taxation, wages, and other mandates. If you want to succeed in the world of business, it is necessary to have sound financial management in order to ensure that your books are up to date and accurate. Many companies fail when they do not have good and legal financial management. There are a few ways to ensure that you maintain good standing with Uncle Sam without leaving the details up to an accountant or banker or attorney.

Start With the Books

Business analysis is a course taught in many university classrooms, but for company founders who do not have the educational background there are only a few things that proper bookkeeping comes down to. Being able to record the information about money coming in and money going out will go a long way towards ensuring that all your taxes are in line and you are not employing any illegal means and methods. In addition to the legality of your operations, keeping good records will allow you to determine whether or not you are making money, and making as much as your corporate goals dictated. It can help you determine what business allies and partners are helping you keep your company afloat and what entities are bringing it down. Finally, it can predict a rough future ahead in the short and long term. The best way to make sure your books are in good order and up-to-date with the law is to rely on an accountant to both do taxes and prepare financial statements. If necessary, you can hire someone with the background to do it for you, but it is necessary to have someone review your records before the IRS does.

Hire Some Help

When business is good but you are having difficulty meeting the demand of your customers, it is a sure-fire sign that you will benefit by hiring more employees. There are eight different steps that need to be taken in order to hire any person and comply with all federal and state regulations. Start with an employer identification number from the IRS, which will be the foundation for reporting income as well as payments to employment. Then, keep records of employment taxes for up to four years, including federal income tax, federal wage tax, and state taxes. Get employee eligibility verification by making sure that a potential employee is a US citizen, an immigrant with a right to work visa, or a foreigner who you are willing to sponsor. Register with the state’s hire reporting program and then get worker’s compensation insurance so that any harm will not leave you liable. Post all notices of employee rights, the file taxes and keep all your records.

Insure the Help

If you run a simple business that deals more in computers and memos than in heavy lifting, you are not likely to need to lay down a large amount of your budget on worker’s compensation insurance. Even so, an accident in your business can set you up for a massive lawsuit. This insurance will provide wages and medical payments in the event that an employee has to miss time due to an injury. If the employee signs the waiver to agree to this compensation plan, they automatically lose the right to bring a lawsuit against their employer, and if they refuse to sign the waiver you have the right to refuse employment. This keeps your business on solid footing without any risk.

Author Bio: Andrew Deen is a writer who creates informative articles in relation to the field of law. In this article, he offers a few business financial tips and aims to encourage further study with a masters in law programs.