When you run your own business or a small business, you know there are many pieces that go into the puzzle that makes up a successful business. You generally need a great concept and provide a great product or service that allows you stand apart from similar products or services.
You need to have the right people if you have employees and be able to trust and count on them to execute for the business. If your business is in a crowded marketplace, such as the restaurant or retailing business, having a great location, with great traffic or being located where you stand out, can make a big difference between lukewarm and genuine success.
And you have to deal with all of the legal and regulatory demands of your business, from proper licensure to regulatory filings and scrupulous maintenance of your local, state and federal tax obligations.
If you only have a few employees to help with your operations, it can be easy to be sucked into your day-to-day running of the business, and after a 12- or 16-hour day, dealing with aspects of bookkeeping and other administrative records may be too much.
Likewise, if cash flow is lagging, you may feel it is necessary to withhold some of your business taxes, such as sales or payroll tax. You may hope to make it up later, but that can be a slippery slope leading to greater problems.
It is unclear what the problem was with a Smashburger franchisee that was closed by the Ohio Department of Taxation for failing to pay state sales tax obligations.
The business now is now closed after the vendor's license was suspended, and the franchisee has been added to the Habitual Offenders Program. They also face two tax liens more than $15,000 from the state.
Having an accurate tax accounting system in place can help prevent these issues, by ensuring that you know exactly what your tax obligations are as the accrue. Overdue taxes, as this case demonstrates, can cause severe and potentially terminal problems for you business.
Source: bizjournals.com, "State shuts down Smashburger in Central Ohio," Dan Eaton, September 11, 2015