Kavan Choksi on the Importance of Accountants for SMEs
When pursuing entrepreneurship, people must be aware of what must transpire when managing a business. On rare occasions, even those new to the game fail to protect their business because of tax issues.
According to business management consultant Kavan Choksi, some business owners have a strong background in accounting and finance. This is an excellent way to cut costs since the company won't need an accountant. However, if entrepreneurs need more understanding in accounting, finance, and taxes, it's a cue for them to hire an accountant.
Accountants are proficient in managing accounting systems for big companies and small businesses. All businesses are required to pay taxes on their income. This means that the company must pay tax on its profit. Tax is paid depending on the type of business.
With an accountant on board a small business, Kavan Choksi says that state income tax can be paid by setting up a system to collect, report, and pay sales taxes. It's important to note that not all states require businesses to pay state income tax. That said, it's a good business practice to have a system ready to report and manage the money that comes in.
Accountants help small business owners manage excise taxes on use and consumption. Accountants also help companies pay self-employment tax.
Kavan Choksi mentions that the chances of a business closing down due to tax problems are great. Because of this, many seasoned entrepreneurs know how heavy the burden can become when the tax needs to be paid the right way.
Filing taxes is a way to protect a business. This is another reason, Kavan Choksi says, why accountants are important.
Kavan Choksi is currently writing a series of blogs and articles based on his knowledge of finance, business, and economics. Subscribe here to read his articles and receive updates.
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