Compliance means adherence to or obeying a certain set of laws and regulations. Compliance in a corporate sector or business means the company obeys 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:
- The government imposes internal compliance regulations on specific entities.
- State authorities impose external compliance requirements.
Internal compliance requires that records of business dealings, transactions, sales, profits, inventory, loans, investors, and lenders be 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
The following are the few important and significant compliance regulations required that can be perfectly managed by using QuickBooks.
Payroll Taxes
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.
Employee Classification
Classification of employees is one of the most important compliance regulations. In July 2015, the Department of Labor issued an interpretation of an administrator. This interpretation explained that most workers are categorized as employees and should not be considered independent contractors.
A high degree of adherence, compliance, and regulations is required for employees. Withholding of taxes from employee paychecks is needed. And they are entitled to benefits.
In contrast, contractors are not entitled to any employee benefits. No withholding from their paychecks is required. Less regulation is implemented on them.
QuickBooks is an easy and perfect solution to classify paychecks with holders by using W-2S while using 1099 Wizard for use with contractors.
A wrong classification of employees can result in steep fines, but QuickBooks is the perfect remedy.
Credit Card Fraud
The complete guide to EMW regulations of QuickBooks is 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 the 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.
State Regulations
Regulations of every state are different. Every business owner must be well aware of their particular state’s regulations to avoid fines and penalties. A few examples of regulations are:
- Many states have increased the minimum employee wages.
- Paid sick leave is granted in some states.
- Few states require to file employee paperwork early. This paperwork should match federal regulations and requirements.
QuickBooks is a great tool to handle these accounting regulations.
Overtime Regulations
QuickBooks helps in compliance with overtime regulations. Overtime regulations differ with each state. Just enter information on the QuickBooks app to calculate employee overtime and track employees’ working hours.
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 attach them with expenses via the QuickBooks mobile app. Using QuickBooks, your data is well organized and 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 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.
Conclusion
QuickBooks has apps and software that are used to calculate and maintain the data required for perfect compliance.
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