We have decided to post stories from time to time about our accounting practice and the problems we help solve to our clients. We are doing this (apart from a bit of self-promotion, of course) with one main goal in mind. Namely, to show that even in the area of accounting and taxes, which is still underestimated by so many entrepreneurs, very unpleasant situations can occur. Situations that can threaten the financial stability of a company. Perhaps by doing so, we will make some owners take a little more interest in the management of their company’s accounts and economy than they have done so far. You could already read the first stories here on the blog a few days ago. Today we come up with another one.
This one took place in July this year. On the morning of July 1, the owner of a company with an annual turnover of about CZK 18 million called us to say that he had not kept proper accounting records for 2022 and that his tax base was CZK 2,000,000 according to the accounting data. Thanks to this, a nice “gift” in the form of corporate income tax in the amount of CZK 380,000 would be waiting for him (not to mention the subsequent advances).
Since there was not much time left, we deployed several colleagues to deal with the situation, primarily the chief accountant and the analyst. In a few hours, they analysed the entire year, identified all the errors in the bookkeeping and prepared a new tax return with the stamp of a tax advisor. The tax base and the resulting tax were significantly lower after the correction than at the beginning. Even after paying for our services, the client saved literally hundreds of thousands in income tax.
For any bad tongues, we would like to state straight away that this was not an attempt at tax optimization, but a correction of poorly kept accounting.
The lesson? Communicate with your accountant regularly, try to understand at least a little about the accounting outputs and how they are constructed and calculated. Ask to know on a regular basis (monthly or quarterly) what amount of various taxes you should expect to pay at the end of the accounting period and, more importantly, why.
