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Margin and Taxes

Random Tip


Mon, 04/15/2013 - 14:45 -- admin

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Margin and Taxes

 As I write this, it’s 4/15 and the office is quiet at 5:30pm for the first time since about mid-January.  As you can imagine, having an office full of accountants during tax season can get a bit hectic.  Getting your tax bill can be frustrating but “Paying taxes is a good thing.  The higher your taxes, the better your business is doing*.”  Because if you are paying taxes, then you have profit in your business.  Profit means margin to weather the storms of unexpected problems as well as unexpected opportunities.  Paying taxes are an indicator that you have margin in your business.  
From what I’ve seen, poorly running  computer systems are an indicator of lack of margin. You might be one computer failure away from a major disruption in your business processes.  Think about how long you could go without your QuickBooks or other accounting system.  How long could you go without email?  How long could you go without access to the internet?  Investing in your IT infrastructure provides margin in your business because it keeps those business processes running which keeps the revenue flowing in.  After all, there's a good reason those business processes are in place.
*Simple Numbers, Straight Talk, Big Profits. —Greg Crabtree.  (If you don't have an accounting background, this is one of the best books on running a business I've read in a long time).