In 2017, the Internal Revenue Services (IRS) processed 245 million tax returns along with other types of tax forms.
With such a high volume of tax forms to process each fiscal year, the IRS looks for obvious discrepancies or red flags in tax returns that alert for suspicious tax evasions. Once a red flag has been found, the IRS further audits the tax return.
As a small business, the consequences of failing an IRS audit is severe. Not only would you have to pay additional tax or interest on tax penalties, you’d also have to refurbish tax documents (bank statements, invoices, etc.) related to the audit trail for the past two to five years. And in the worst-case scenario, if you fail to show your tax documents, your tax assessment could be considered fraudulent and you could face either three years imprisonment or $100,000 in tax penalties.
Is your finance department logging extra hours just to manage all the financial paperwork this tax season?
We know it is. And that’s why we highly recommend shifting to robotic process automation (RPA) to cut the clutter.
As an emerging technology, RPA competes with intelligent/cognitive technologies such as artificial intelligence (AI) and machine learning. But unlike most emerging tech, RPA is one of the most affordable options because it’s based on a cost-effective software platform. That’s why small-business finance managers should consider adopting it.
We understand that a key challenge for adopting any new technology is a lack of proof of concepts and use case stories that makes it hard to convince small-business owners and leaders to adopt RPA.
However, small-business finance managers who adopt RPA in accounting improve the accuracy of managing financial data by about 95 percent. This helps them process tax filing 3 to 4 times faster, with 70 percent more cost savings in the accounting process.
Note: This article is intended to educate small businesses on the international income tax landscape for remote employees. It is in no way intended to provide financial advice. For detailed financial advice please contact your tax consultant.
With 70 percent of global employees working remotely at least once a week, remote working—or telecommuting—is one of the key workplace trends in 2019.
As a result, small businesses must navigate the muddy waters of deducting payroll taxes based on international business tax regulations while hiring or sending employees abroad to work remotely.
Since international tax regulations differ from country to country, some key challenges that small businesses must address include:
- Avoiding double taxation
- Classifying remote employees as independent contractors or freelancers
- Deducting Social Security and Medicare
- International tax forms for a remote employee
Small-businesses owners not well-versed in international business tax regulations will see the above items as an obstacle.
Would you trust a robot for financial advice?
Not the fictional “robots” you see in sci-fi movies or read about in articles on advanced artificial intelligence (AI) that predicts the future. We’re not there quite yet!
The robots we’re talking about are digital wealth management platforms called robo-advisers. They are increasingly being used by tech-savvy millennials to maximize their investment returns.
This trend shows us that small financial advisory firms need to be prepared to tackle the diverse financial requirements and service expectations of millennials.
We usually associate blockchain with cryptocurrencies: Its application in other industries remains untapped, as it’s still in the nascent stages of development.
But in a short time, blockchain has emerged as a key financial technology (fintech) that can enhance financial management for small-business leaders and finance managers.
Key blockchain for finance facts:
- Blockchain has the potential to secure financial transactions with the use of advanced cryptography.
- Blockchain enhances financial compliance and transparency by creating a decentralized ledger for small businesses.
- Blockchain is gaining traction among business leaders as more proof of concepts (POCs) have emerged that can be applied in finance for small businesses.
However, like other emerging technologies, such as AI and machine learning, small business owners and finance managers face some key challenges in understanding the impact of blockchain such as:
- Thirty-one percent of small business owners aren’t sure which technology is the best fit for them.
- Eighteen percent of small businesses find it difficult to integrate new technology with their current technology setup.