Do you ever look at massive organisations and marvel at how they manage to keep every moving part working together without much chaos? It’s called corporate governance, and the trick to getting it right is implementing it into an organisation from the beginning – before it becomes too big.
A small business probably has you undertaking multiple roles at once, but once you start to grow, this will change. You could retain ownership and control, you might enter into a partnership or you might bring several shareholders on board. You might have to split up responsibilities in terms of who organises and pays attention to different aspects of the business such as salaries and billing. Corporate governance will help you to set up a structured code of ethics, standards and practices so that as things become more complicated and the financial and legal stakes get higher, everyone is protected and kept accountable.
When it comes to business tax, corporate governance can help you to create a future planning strategy that will ensure compliance and help you to manage your risk effectively. Transparency is becoming increasingly important, and in the future your business could be required to have a formal tax control framework, risk register, annual plan, and testing plan in place. The larger your business becomes and the more revenue it generates, the more public disclosure will be needed, as it will form a part of one’s corporate social responsibility to prove that you’re conducting business ethically and responsibly.
HOW AN ACCOUNTANT CAN HELP
Getting an accountant to assist you with tax related corporate governance will most likely start with benchmarking your current objectives, accountability and practices, as well as how you currently undertake reporting and approach compliance. A corporate accountant will consider how you collect and store sensitive data and the qualifications and roles of your personnel.
While you might not need your corporate governance framework to be very robust at this stage, having a structure in place will help you identify any potential future gaps so you can start to take the necessary steps to close them.
As with many features relating to tax, doing a little extra work now can save you from being overwhelmed later. If you’re ready to get started on your corporate governance, contact Stones Sharp today.