4 tips for managing business licenses
Operating a business can sometimes feel like running a small country with all the responsibilities, regulations, and complications. People are looking to you to deliver on your promises; you must stay abreast of and abide by ever-changing laws; and at the end of the day, it doesn’t matter who may have dropped a proverbial “ball,” the responsibility is on you. This includes managing your business licenses.
The importance of properly tracking, storing, and displaying your licenses and permits cannot be overstated. And that duty is yours to oversee. When you don’t display licenses or allow them to expire, you may incur fines, face additional reinstatement costs, or get shut down. If authorities shut down your business, you’re not only looking at revenue loss, you could lose some employees, too.
4 tips for managing your business licenses and permits
1. Don’t wait on renewal notices
Some business licenses expire after a designated time frame. These, of course, vary by your industry, business structure, and issuing state and local municipalities. The terminology jurisdictions use can also differ — what is a license in one locale may be a permit in another. But “a rose is still a rose” — and some require renewals.
For federal permits and licenses, contact the appropriate issuing agencies for renewal procedures. Some of the most common departments are:
- U.S. Department of Agriculture (USDA)
- Alcohol and Tobacco Tax and Trade Bureau (TTB)
- Federal Aviation Administration (FAA)
- Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)
- U.S. Fish & Wildlife Service (FWS)
- National Oceanic and Atmospheric Administration (NOAA)
- Federal Communications Commission (FCC)
Many new business owners mistakenly rely on issuing authorities to notify them when licenses are about to expire or deadlines, ordinances, and fees change. But as with many government entities, they’re often overwhelmed, things fall through the cracks, and they still hold you responsible for what falls through their cracks.
You typically need their paperwork to get started on the renewal process, but what if they inadvertently send your documents to a local store manager instead of sending them to headquarters?
To be certain you never default on licenses, keep a calendar of your license expirations. One of the most effective and low-maintenance solutions is to use an automated app with email notifications for upcoming renewals. Apps do the calendar watching for you and can help keep you ahead of expirations with plenty of time to reapply.
2. Store and track it all
Monitoring your renewals isn’t the only tracking you want to do. It’s a good idea to ensure all licenses, permits, and related documents are where they’re supposed to be, and the right person knows. Imagine your license expires in three days; a local authority sent a renewal notice to one of your satellite location managers in another state; that manager put it in “some” desk drawer and is now on vacation.
You should know where pertinent documents are going and where they’re stored. What if you get an unexpected audit? What about that one permit that’s been missing from your wall for months? Do you know where you have a copy — that you can get to easily? Automated software can help keep all your paperwork in one safe place.
3. Keep and update copies and backups
Again, if an inspector makes a surprise visit and you’ve misplaced your license, you’ll want a copy quickly. You might also consider keeping electronic backups. Develop an electronic repository of your license-related documents and keep backups in a separate location in case of a data breach or hard drive crash. And don’t forget to keep your backups current. Expired licenses and documents won’t do you any good. Automated software is also a great way to help manage copies and backups.
4. Display your permits and licenses
Whether you’re legally required to display a business permit depends on the issuing entity. Generally, even if you’re not decreed by law, it’s good business practice to display licenses for public viewing in all locations, including your headquarters. Not only will this please an inquisitive inspector, customers may also appreciate the transparency, particularly in certain industries.
Managing your licenses is so much more than simply keeping track of renewal dates. It requires tracking their location, creating copies of related documents, and making sure they’re easily accessible at a moment’s notice.
If you want help getting a handle on your business license portfolio, take a look at Avalara, a leading tax compliance solution that help business owners manage business license requirements.
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