Inside Small Business | Small Business & Home Business Marketing

How to Survive an Audit

by goWholesale.com

In life, audits happen. While you may do everything you can to keep your business in line and on the straight and narrow, trying to stay under the radar of the IRS, it could just be an unlucky draw that has your company up for an audit.

If you were to get that notification, what would you do? Don’t know? This article can help.

What IS an Audit, Anyway?

An audit is essentially the IRS saying they’re not so sure that you have accurately reported your income to them. This could mean they think you “forgot” to mention some money that came in, or that they think you “exaggerated” appropriate spending and deductions to make your bottom line seem lower. Either way, you have to prove you’ve done everything right.

Unless you naturally prepare for an audit annually, you are going to want as much time as you can to get ready. When it comes time to set an audit date, try to push it back as much as possible. Also try to keep the audit out of your workplace. These kinds of things are a distraction to others at work. If you work alone, from home, you don’t need them nosing around. Instead, ask to have the audit at the IRS offices, or better yet - at your accountant’s office.

Get Ready, Set….

Now you need to be in the right mindset. Chances are if you are being audited, the IRS is pretty sure you owe more than you said you did and they are going to try and get their money. You should go into this prepared to pay, if needed; but the key is to pay as little possible.

Now it’s time to really do your homework. If you have an accountant, give them a call, as they are going to be in this with you since their name is signed to the document. This is good, because they are going to likely have more expertise in this field than you do. Seek their advice on how to make it through this.

If you don’t have an accountant, this is your fight alone, and you need to be prepared for it.

Find Your Paper Trail

Every last slip of paper that proves what you made and what you spent this year is going to count in an audit. While most businesses keep decent track of this, there is always room for improvement. It’s always important, even if you’re not being audited, to keep your financial documents as organized as possible.

See what you are missing, try to replace any records that you can’t find but know you should have.

Know the Facts

There are plenty of tax laws on the books meant to protect small businesses, but the IRS doesn’t have to go out of their way to tell you what they are. Do your research. Learn the laws and how they impact your business and your audit.

If much of the information you are reading in tax guides is confusing to you, or not clear enough to let you know how it impacts your case, you should get in touch with a tax professional to make sure you understand them.

TMI (Too Much Information)

A lot of people go into audits talking about their business and their spending and deductions, thinking the more they talk the more professional and ‘on top of things’ they will sound. Not so.

The more you talk, the more the IRS auditor can hear about how you run your business and learn things you may not have wanted them to know. The best rule of thumb is to only speak when spoken to.

If you have an accountant or tax attorney (and you SHOULD at this point), they’ll do all of the talking.

Get Help If You Need It

Once you are in the audit, you still have rights and the ability to walk away. If you feel the auditor is not being fair to you, you can ask to speak to a manager, or call for a recess of the hearing in order to call in a tax professional.

While you may think you can do everything yourself, sometimes it’s better to be willing to call on a little assistance.

Don’t Settle For Just Any Results

After the audit has been completed, you are going to get the results in a report. If any part of the report doesn’t make sense, call the auditor and ask for an explanation.

If you are not happy with the results, and think they are wrong, you can always appeal the report and try again for better results.

goWholesale helps small businesses find suppliers of the products and business services they need to grow. Connect to wholesale suppliers and find valuable information for your business today at www.goWholesale.com.

Related Topics: Business, Entrepreneurship, Money/Finance    No Comments    

PCI Compliance

by goWholesale.com

With all the concerns about identity theft and credit card fraud these days, it’s no surprise that credit card companies are keeping a closer eye on businesses to make sure credit card numbers and personal information are being properly protected. This is how PCI compliance standards came about.

PCI stands for Payment Card Industry. The compliance standards were set up and not only apply to your business, but also the banks and credit card companies. The industry wants everyone who is in contact with credit cards to be responsible with the sensitive personal information that has been entrusted to them.

The importance of being PCI compliant can’t be over-emphasized. If you are found to not be PCI compliant, you can have your credit card processing privileges revoked.

Imagine how much business you would lose if you could not accept credit cards!

Network Security

In order to charge a credit card, the cardholder’s information has to go through a network to be processed. Wherever that information is sent and stored needs to be protected in order to meet PCI compliance standards. If you have an online business that runs through a web server, your website processing is generally covered by the server company - they promise security. You should check to make sure their security includes encryption of at least 128-bit SSL (secure socket layer) to meet the standards.

But what happens to the information when it reaches your home or office computer? Do you keep any of the customers’ information? Even if you just keep their names, you need to have that list of customers secure on your system.

You also need to make sure you have the proper firewalls and security programs in place to keep that information safe.

Cardholder Data in the Office

If you keep any of your customers’ card information on file in your computer or elsewhere in your place of business, you need to protect it in order to meet PCI compliance standards.

While many businesses do store customer credit card information to make things easier for repeat purchases, it is necessary to make sure that data is encrypted, so anyone who tries to steal the information will not be able to decipher it.

Train Your Staff

If you have employees, make sure they have been properly trained in the procedures to keep customers’ information safe.

You should have a company policy for dealing with sensitive information - and make sure all your employees are very clear on the protective procedures that must be followed.

Limit Staff Access

While you may have trained your employees in the right way to deal with credit cards, there are always some people that will take advantage of sensitive personal data. Unfortunately, you won’t know it’s one of your employees until it’s too late. The best way to avoid this is by limiting their access to sensitive information.

This information should only be allowed in the hands of those who need to have access to it. Even then, each person should have their own login ID to get into the system so you can monitor what they are looking at.

Keep Your Computers Protected

Every day, hackers are coming up with new ways to get into the computer systems of businesses around the world. While your business may not be the first target on their list, if your computer systems are easy to break into, they may consider you an easy target.

Make sure to keep your computer operating software and virus protection software up to date. Most companies offer regular maintenance updates to fix any loopholes that have been found in a system.

Once you have a cardholder security system in place, you need to make sure it’s working. Test your system regularly. You can even have security testing companies regularly check your set-up for any openings, and keep you one step ahead of the hackers.

goWholesale helps small businesses find suppliers of the products and business services they need to grow. Connect to wholesale suppliers and find valuable information for your business today at www.goWholesale.com

Related Topics: Business, Entrepreneurship, Money/Finance    No Comments