The proper paperwork needed for running a successful business
We often think that it’s those things that we do that can hurt us; but what about those things that we forget? We are all familiar with the saying “ignorance is no excuse for breaking the law”. This is equally true with regard to running your business. Let’s look at some of those important things that may go overlooked in your business.
There are many basics of running a business that we all know and there are also many that we sometimes tend to overlook. Many of the issues in this article fall under the realm of legal basics. Many just seem like extra paperwork. Although you may hate paperwork it is often just a fact of life and vital to running a successful business.
Although I am going to remind you of some requirements, it is important that you consult with your accountant, legal and insurance advisors. These professionals are often the source of vital information you need to not get hurt.
Besides the obvious licenses and insurance certificates, there are a number of other important documents, some having to do with the jobs themselves and others required if you work with subcontractors.
Capital Improvement certificates are required if you are not going to charge a client sales tax. If you do not have the appropriate certificates on file and you get a sales tax audit, you will be liable for the sales tax on the jobs you did. It does not matter if you can prove the job was for a Capital Improvement, you must have the properly filled out form and should keep a copy on file with all the paperwork for the job. In addition if you are using subcontractors they will require a copy of the Capital Improvement certificate so that they don’t have to charge you the sales tax. It is easiest to start this paperwork when you sell the job. Simply ask your client to fill out the certificate when they sign the contract. Most people don’t mind filling out a form to save themselves from paying taxes.
Getting proper and complete paperwork from subcontractors is also important in protecting you and your business. This includes their tax identification number and insurance certificates. We recommend you create a checklist of paperwork and certificates needed from subs. On this checklist you can also include terms and conditions for the work they will do for you. You might also want to include references, payment terms and any other information for ensuring a better relationship with your subs. Ensuring a clear understand of what is expected from each of you will also help to prevent later disagreements.