Compliance – One of the biggest challenges to small business survival
The following post was written by John Miller, President of Passport Software, about the complex regulatory requirements and compliance challenges faced by small businesses. We hope you find it useful.
Small business creates 80% of new jobs in our economy, but like it or not, the land of the free and home of the brave imposes Herculean regulations and compliance challenges to them, especially if operating across state, city and county boundaries.
All levels of government; federal, state, city, county/parish and special local taxing authorities may impose taxes and regulatory reporting requirements on businesses with little thought to the cost of compliance, up to the point where the courts occasionally rule against them for extremely burdensome requirements.
The Costs of Compliance
Business owners know the costs, in both time and money, of compliance with these requirements and reporting, because they hire professionals (lawyers, accountants, consultants and others) to study the regulations, prepare the reports and usually pay their accountants to review and file for them, often with a check attached.
Commonly referred to as “the cost of doing business” this is no simple task nor a small price to pay. Failure to comply can invoke the wrath of governing authorities, with penalties and interest accumulating while the entrepreneur is wading through the details.
Today, as our post-COVID economy struggles to regain momentum, despite a labor shortage due to extended, record-high unemployment benefits, every state’s DOR is licking their chops at the prospect of now levying income taxes on employees of out-of-state businesses as many employees are now working from home, instead of commuting to the office, and some are working in another state or tax jurisdiction.
Many business owners are saying, “please help us keep this ship floating”, while government intervention seems to operate under the illusion that computers make compliance easy. Not true! Every new regulation makes it harder to stay profitable and be competitive with other countries, where there are no or much fewer regulations, minimum wage laws or OSHA.
Compliance is where Passport Software offers substantial assistance to minimize your time spent calculating your adherence to the laws. PBS™ Accounting Software with optional in-house payroll assists with compliance management, with the heart of regulation managed in PBS™ Payroll processing.
Passport Business Solutions™ Payroll module helps in many of these areas:
· Employee time-keeping and record-keeping of hours worked
· Part-time or full-time status for payroll, as well as the Affordable Care Act reporting
· Tax withholding and payment for government entities
· Qualified retirement program contributions
· Forms W-2, 1099, 941, ACA 1094 and 1095 are provided in both paper and electronic formats.
· State copies in paper and electronic formats.
· SUI, FUI, etc.
· W-4 handling
· Insurance deductions, and HSA contributions
· Statistical records for EEOC and DOL purposes.
· 401(k) and other retirement plans.
In addition to payroll, we help small businesses comply with sales tax collection requirements dictated by the Supreme Court’s Wayfair decision. This decision requires small businesses to collect sales tax from customers in other states if their sales there exceed a threshold. The states’ have overhauled their sales tax laws for “remote sellers” to capture this new revenue.
With our CPA Partners, we work to help you avoid the pitfalls of this complex regulatory environment. To date we have assisted companies in avoiding millions of dollars in fines, penalties and interest due from failure to file, or from errors in filing which we helped to amend.
Yes, compliance assistance is one of the big ways we assist companies, though we much prefer helping you increase efficiencies in your operations by applying our software solutions to the manufacturing floor or to your warehouse distribution operations, and other supply chain processes. Much of the information needed for compliance originates and is built into these operational areas, flowing through the system like clockwork.
Some remember Steve Forbes, the publisher in two presidential primaries, who advocated a flat tax that would dramatically simplify our taxation system. Alas, that never happened and the trend seems to continue to introduce more and more complexity, instead of simplification.
Our proven, solid accounting software applications can ease the burden and help you remain in compliance. Call 800-969-7900 to learn more about how Passport Business Solutions™ can help with compliance challenges. Or contact us – we are here to help.