In Cameroon’s rapidly evolving business environment, startups face unique challenges that, if mishandled, can result in serious financial and legal consequences. At Benford & Associates Ltd, we have identified five of the most common and costly mistakes entrepreneurs make when navigating their responsibilities, along with practical strategies to avoid them.
1. Poor Financial Recordkeeping
Startups often neglect to document routine business transactions such as digital subscriptions, local travel costs, or client-related expenses, which leads to inaccurate tax returns and the loss of deductible expenses.
To curb this, it is important to implement cloud-based accounting systems to automatically track income and expenses, and generate real-time financial reports. Proper documentation is not just a tax tool it is foundational to sound business management.
2. Missing Statutory Tax Deadlines
Failure to submit monthly or quarterly declarations (e.g., VAT, CNPS, or IRPP) within the legal deadlines often triggers financial penalties, interest accrual, or suspension from doing business with formal partners.
Startups can set automated reminders or engage a professional tax consultant to monitor and meet all filing deadlines, ensuring your business remains in good standing with tax authorities and banks.
3. Employee Misclassification
Many startups erroneously classify full-time employees as freelancers or independent contractors, exposing the business to backdated CNPS contributions, penalties, and potential litigation.
Understanding the legal distinction between employee and contractor under Cameroonian labour and tax law is of utmost importance. When in doubt, seek professional advice to structure contracts and payroll systems that comply with CNPS and labour codes.
4. Overlooking Available Deductions & Credits
New businesses often fail to claim allowable deductions such as; startup expenses, training costs, or technology inputs resulting in overpayment of taxes and missed savings opportunities.
It is necessary to conduct a tax efficiency review with a qualified advisor to identify all available deductions and tax credits applicable to your sector. Staying informed of changing tax legislation is key to long-term savings.
5. Operating Without Professional Tax Guidance
Startups frequently try to manage their taxes internally, assuming professional help is a luxury. This often leads to errors in filings, exposure during audits, and lost time correcting issues.
Engaging a tax advisor early is key. The right tax partner will help you with strategic planning, compliance frameworks, and proactive risk mitigation, freeing you to focus on growth while ensuring fiscal integrity.
Conclusion: Tax Clarity Builds Startup Resilience
At Benford & Associates Ltd, we believe that a well-informed startup is a resilient startup. By avoiding these common pitfalls and collaborating with experienced advisors, entrepreneurs can scale with confidence, avoid regulatory surprises, and unlock long-term tax efficiency.
For tailored startup tax advisory, contact us at:
