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Filing Your Annual Report Is A Simple Task That Can Have Big Consequences

Filing Your Annual Report Is A Simple Task That Can Have Big Consequences

by | Sep 13, 2024 | Bookkeeping Basics

Filing an annual report with your Secretary of State is a straightforward task. Your business must file many reports, including income and payroll taxes, as well as federal and state taxes. However, an annual report is often overlooked.

Many states require filing an annual report with the Secretary of State. Although it may seem like a minor administrative task, not filing can have significant consequences. 

What is an Annual Report?

In most states, the Secretary of State requires filing an annual report. The information required provides up-to-date information about your company. It is the state’s way of ensuring you are still operating and legally maintaining everything.

Why does this matter? Keeping the state informed about your business’s status helps you stay in good graces. Filing your annual report on time is a great start.

Timing is Everything

When it comes to filing deadlines, every state has its own rules. Some states require the report to be filed on the anniversary of your business’s formation, while others have a set date every year. Missing the deadline can cost you. It’s essential to know your state’s filing schedule. Check your Secretary of State’s website. You can find a list of all states in this report.

What Happens if You Don’t File?

I get it—life happens. The annual report deadline might slip through the cracks. But missing the filing date can lead to more than just a slap on the wrist:

  • Late Fees & Penalties 

Consider this the state’s way of reminding you to file with a price tag attached. Late fees are an unnecessary expense you could easily avoid.

  • Loss of Good Standing

Securing loans, permits, or contracts may be challenging when one loses one’s good standing with the state, significantly hindering growth.

  • Dissolution of Your Business

In extreme cases, the state can dissolve your business without your knowledge. Imagine discovering that your company no longer exists. Reinstating a dissolved business is a long, frustrating, and expensive process. It’s much easier to stay compliant from the get-go.

The Benefits of Staying Up-to-Date

Here is the positive side of being proactive with your annual report filing:

  • Legal Compliance

Depending on your state, filing your annual report may be non-negotiable. Staying compliant means your business can continue to operate without any legal hiccups.

  • Avoid Unnecessary Penalties

Why pay more than you have to? Filing on time keeps extra fees at bay and saves your hard-earned money for where it matters—growing your business.

  • Continuous Operations

You can continue business as usual when your business is in good standing. You’ll have no problem applying for loans, renewing permits, or working with contractors. Plus, you won’t have to worry about sudden legal barriers.

  • Peace of Mind

Keeping up with your filings lets you focus on your best work without worrying that something’s fallen through the cracks.

How to Make Filing Your Annual Report Easy

With some planning, you can make filing your annual report a seamless part of your yearly routine. It’s a straightforward process that, when done right, can give you peace of mind for the rest of the year.

  • Set Reminders

Implement a system to remind you well before the deadline, whether with a calendar, a project management tool, or even good old-fashioned Post-it notes.

  • Know Your Deadline

Each state has different filing dates, so mark your calendar! To avoid any last-minute surprises, verify the due date for your annual report on your Secretary of State’s website.

  • Keep Records Updated

Throughout the year, make sure your business records (addresses, officers, etc.) are current. This will make filing your report a breeze when the time comes.

  • Seek Professional Help

If you need clarification on filing the report, consider hiring a professional. Having the reassurance that it is correct can relieve stress.

A Little Effort Goes a Long Way

As a business owner, you must comply with your annual report filing. It’s a small task with significant consequences if overlooked. You can stay compliant by being proactive, staying organized, and leveraging professional help when needed. So, stay informed, file on time, and focus on growing your business.

If you need help filing your annual report, please don’t hesitate to contact me. I’m here to assist you in this essential task. Schedule a call to learn more.

Reconciling your bank statement in QuickBooks.

Reconciling your bank statement in QuickBooks.

by | Jun 11, 2024 | Bookkeeping Basics, QuickBooks

If I have my bank accounts linked in QuickBooks, do I need to reconcile them?

Yes, you should be reconciling at least your bank accounts monthly. The biggest reasons are:

  1. Detect Fraud: To catch fraudulent charges as quickly as possible and report them to your bank, you need to be able to notice those charges. If you are not reviewing and reconciling your accounts with the bills you’ve entered into QuickBooks (or whatever accounting software you use), you can miss them. This is especially true if you run a lot of smaller or similar-priced transactions through your business.
  2. Catch Bank Feed Errors: Your bank feed can contain errors. I’ve seen accounts become unlinked and transactions not load. Recently, a client’s credit card charges were uploaded twice—once for the day the credit card was run, and again for the day it cleared the account. Your accounts and financial reports will tell you the wrong information without reconciling the account to catch these issues.
  3. Correct Human Errors: You can add human error if you write out your checks instead of printing them from your software and then typing the amounts into your accounting system. Reconciliation can help you find that $154 check that was keyed in as $145. The rule of thumb is if you’re off by something divisible by nine, it’s probably two numbers switched around. Sometimes, the error could also be on the bank’s side where something is misentered. You need to contact your bank to correct the information promptly.
  4. Ensure Tax Compliance: Incorrect numbers in your records can affect your tax reporting. Incorrect transactions could cause you to overpay or underpay your estimated or sales taxes.
  5. Avoid Overdrafts: Missing expenses in your bank feed can lead to spending money you don’t have, resulting in fees and penalties. This can especially happen if your cash flow is tight.
  6. Maintain Accurate Financial Statements: Having incorrect financial statements can cause you to make inaccurate assumptions about your current business finances and could lead to choices that cause issues in your business.

By regularly reconciling your accounts, you can rest assured that your financial records are accurate and up-to-date. This provides a solid foundation for managing and growing your business, giving you peace of mind.

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