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Recordkeeping Important In Tax Audit

Recordkeeping Important In Tax Audit

Restaurant owners should know that recordkeeping is very important not just for the daily operation of the restaurant but also for the sales taxes. The business will be negatively affected if does not adhere to the law. Mishandled sales as well as taxes can be the end for the business. Recordkeeping coupled with audit insurance such as audit shield will ensure that your business is protected.

Sales taxes are unavoidable for people who have their own restaurant or if they are investing in one. Restaurant sales come with tax and according to the law, all transactions including purchases and sales, should be well documented. In addition, sales tax such as payroll taxes are considered to be trust fund taxes and the owner or investor of the restaurant has the liability for tax debts incurred by the trust fund.

For restaurant owners, the most important records such as sales transactions and purchase transactions. Sales transactions include sales, amount for every sale, the tax charged for every sale, the tax collected for every sale and documents concerning tax exemptions. Recordkeeping of the receipts, cash register tape, sales slip, guest check and invoice should be well organized.

For purchase transactions, records such as cost of goods, janitorial services, supplies and other purchase records should be kept. Each of the purchase record must indicate if sales taxes have already been paid or if there are taxes due. These expenses will also show if the sales you have in record is a match.

For POS systems, make sure that it is setup correctly and all transactions are properly recorded. The records from the POS must match the receipts of the business included in the record. Therefore, you are the owner or investor, must have control with the POS system to make sure that it is accurate and all transaction records are complete.

If the recordkeeping is not accurate and you get audited, you might be facing some trouble ahead. This is where audit insurance such as audit shield comes in because in case of any errors on your part, you will be covered and your restaurant might be able to recover.