It's fair to say that most business owners are working toward greater profitability and growth. And while growth presents businesses and their employees with countless opportunities, the downside is the potential of having to stroke a big check to the Internal Revenue Service come tax time. Pile on ever-changing tax codes, exemptions, regulations and deadlines – and it’s no wonder that everyone is reaching for headache relief during tax season.
Most recently, Forbes Financial Council asked me to weigh in on smart tips to help business owners navigate this time. And while my peers offered up some great advice for small business owners, my approach – setting aside an additional 10 percent, on top of what you’d normally set aside – is geared towards mid-sized businesses with a steady cash flow.
Giving yourself some financial wiggle room enables businesses to close gaps with any revenue irregularities that might develop over the year. I recommend taking small steps by banking a portion of that every month, so it’s ready when you need to file. But don’t stop there. For service-based organizations, factor in faster payments, prepayments and any other end-of-year tactics your clients may use to limit or reduce their tax liability.
Interested in more intel from the Forbes Finance Council Experts? Check out our forecasts for the banking industry here.