Compliance means adherence to or obeying a certain set of laws and regulations. Compliance in a corporate sector or business means that the company is obeying all legal regulations and laws required to manage the business, consumers, and employees. Compliance is an indicator of how responsible a company is.
Compliance regulations are categorized into two types:
- Internal compliance regulations are imposed by government on certain entities.
- External compliance requirements are imposed by state authorities.
Internal compliance requires that records of business dealings, transactions, sales, profits, inventory, loans, investors and lenders are well maintained, transparent, and updated.
External compliance requirements include annual reports and franchise tax.
Importance of Compliance in a Business
- The compliance of a business depicts that it is corruption free and well integrated.
- Legal problems and penalties are prevented.
- Operations and processes are improved.
- Better image and public relations.
- Less employee turnover.
Compliance and QuickBooks
Following are the few important and significant compliance regulations required that can be perfectly managed by using QuickBooks.
Regarding payroll, there are a few legal requirements. The first is withholding payroll taxes from employees’ paychecks. Second, is that the business owner must pay half of the FICA taxes of employees. Third, and lastly, is severance pay which is also included in taxable FICA wages according to recent affirmations of the supreme court.
With a paycheck calculator paycheck withholdings can be estimated with great ease and in a simple way using QuickBooks.
Classification of employees is one of the most important compliance regulations. In July 2015, the Department of Labor issued an interpretation of an administrator. In this interpretation, it was explained that most workers are categorized as employees and should not be considered as independent contractors.
The high degree of adherence, compliance, and regulations is required for employees. Withholding of taxes from employee paychecks are needed. And, they are entitled to benefits.
In contrast, contractors are not entitled to any kind of employee benefits. No withholding from their paychecks is required. Less regulation is implemented on them.
Wrong classification of employees can result in steep fines, but QuickBook is the perfect remedy.
Credit card fraud
The complete guide to EMW regulations of QuickBooks are used to replace old structures with new ones, i.e. EMW. EMW chips are implemented to impose more responsibility on business owners for fraud prevention. This EMW chip system is implemented by the authorities who issue credit cards and process payments. If equipment is not upgraded to scan EMW chips, then your liability to prevent fraud on credit cards is increased. QuickBooks is perfectly equipped with this innovation.
Regulations of every state are different. Every business owner must be well aware of their particular state’s regulations so that fines and penalties can be avoided. Few examples of regulations are:
- Many states have increased minimum employee wages.
- Paid sick leave is granted in some states.
- Few states require to file employee paperwork early. This paper work should match federal regulations and requirements.
QuickBooks is a great tool to handle these accounting regulations.
QuickBooks helps in compliance with overtime regulations. Overtime regulations differ with each state. Just enter information on the QuickBooks app and calculate employee overtime and also track working hours of employees.
Stay tax ready
Various types of taxes are required to be paid by the business owners. All expenses are categorized in QuickBooks and easily converted to taxable sheets. Just take pictures of receipts or scan them and attached with expenses via the QuickBooks mobile app. By using QuickBooks, your data is well organized and well prepared to file for taxes. Tax savings can be increased due to better compliance.
Affordable Care Act
Affordable care act states that a business with more than fifty full time workers is required to grant health benefits. A full time employee is one who works thirty or more hours in a week. QuickBooks is used to track the working hours of an employee. By accurate calculation of working hours, you can follow government regulations effectively.
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