We're all aware of paying taxes. It may seem like an annoyance, but in reality our taxes are put towards funding a whole host of beneficial facilities for our communities. The government uses our taxes for things like running our healthcare system, education, environmental protection and infrastructure.
And while most people are responsible and pay their taxes properly, sometimes issues can arise when it comes to paying the correct amount. For example, difficulties can often arise when payments are made in cash.
One way you can help to mitigate the problems associated with filing tax on cash transactions is to keep a good record of all your business finances. One of the easiest ways to achieve this is to invest in a good small business accounting software.
This will allow you to keep electronic records of all incoming and outgoing transactions, ensuring that you pay the right amount of tax on your earnings - minimising the risk of accidentally taking unfair advantage of the tax system in New Zealand.
Business accounting software like the CashManager range could be perfect for your small business, giving you access to the basic accounting systems that can be implemented in order to keep an accurate record of your business transactions.
This software can also be used to prepare your GST forms with ease, taking into account all the information you have within in the system. This streamlines the entire process and helps to ensure your taxes are airtight and safeguarded.
Banking all your received cash regularly can help you to collate all your earnings into one place, and reduces the temptation of making small purchases with earnings without declaring the overall amount received.
The easiest way to avoid accidentally underpaying tax on cash transactions is to simply encourage your customers to make payments through direct debit or internet banking. This eliminates the middleman and will help make the entire process easier for all involved.