A business owner should think about sending plans and policies to their CPA for a quick double-check to ensure they seem reasonable and do not violate the rules of the Internal Revenue Code. Some policies, agreements, or plans might necessitate legal review, also.

 

Once a policy is ready to be finalized, one might wonder how to keep record of it. There are several ways to achieve this. One common way is to write a memo to ‘Company Books and Records’.  Obviously, there is not person with that name, but the memo is noted and stored in the company records. The memo should be dated and signed. To ensure that the date is not scrutinized, the taxpayer might consider emailing a copy so it has a time stamp associated with it and could also send a courtesy copy (CC) to his or her CPA (CPAs are very good at keeping records).

 

In addition to accounting and taxes, plans should be used to help the business owners efficiently allocate resources and to maintain proper business scope. When we continue our series, we will discuss this.

 

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