As the year nearly draws to a close, your company should be in good financial and legal health. The majority of companies are, though, making erroneous assumptions at a cost in terms of fines, non-compliance, or potential savings on expenditures. Some of these most common traps and how to stay safe from them are:
1. Delayed Filing of Taxes
Delays in tax filling promote harsh penalty and avoidable economic burden.
How to Avoid: Track deadlines, remind, and take the advice of a tax consultant for timely filing.
2. GST Filing Discrepancies
Misdeclaration of input tax credit or invoice mismatching lead to audit and loss of money.
How to Avoid: Regular reconciliation of GST accounts, verification of invoices, and correct filing to avoid penalty.
3. Lack of Attention to Financial Statements
Avoidance of scrutiny of profit and loss accounts, balance sheets, and cash flow statements can result in inefficient financial management.
How to Avoid: Conduct year-end audit of finances, detect discrepancies, and correct them.
4. Avoiding Outstanding Payments & Pending Dues
Postponement of outstanding payments will affect cash flow and hamper financial planning.
How to Avoid: Trace pending payments and pay dues on the last date of the financial year.
5. Not Claiming Maximum Tax Deductions
Companies will forget to claim deductions on qualified investments, expenses, and deprecation.
How to Avoid: Have a tax expert review all deductible expenses to maximize tax savings.
6. Forgetting Year-End Inventory Counts
Manufacturers and traders will forget to perform inventory audits, and this results in uncontrolled stock.
How to Avoid: Perform a physical count of inventory and reconcile books to avoid discrepancies.
7. Forgetting Compliance Requirements
Compliance of laws like company annual compliance, ROC compliance, and audit is carried out lightly, open to penalty.
How to Avoid: Prepare a compliance checklist and file all filing of compliances beforehand.
8. Lack of Planning for the Next Financial Year
Not planning for the subsequent year while closing the existing one negatively affects business growth.
How to Avoid: Set financial goals, set up a budget, and make a plan for the next year.
Final Thoughts
Avoidance of these fiscal year-end pitfalls can guarantee your company is compliant, cost-efficient, and as financially effective as possible. Seeking professional assistance and maintaining proper records can make it straightforward and easy to achieve.
Seeking expert assistance with tax returns, GST compliances, or financial planning? Contact LEGAL DALAL today!
