Although we are still months away from tax season, if you prepare your books early you can avoid timely issues when sorting out your financial records. Let’s face it, small businesses procrastinate when it comes to preparing for tax season, but with proper planning and preparation, you can avoid a stressful tax season.
Just sending your financial records to your Accountant can be very costly. Accountants charge an arm and a leg to organize your financial records and prepare your taxes returns. To avoid the costly expense, it would be economical to hire a bookkeeper or do it yourself.
Whether you decide to hire a bookkeeping professional or do it yourself, here are a few tips to help you get organized and prepare for tax season effortlessly:
Gather all your financial documents and separate them (business expenses, cash receipts, bank and credit card statements, etc..). Sort each document by month. (Suggestion: use an accordion folder). You may also take it a little further once you’ve separated your documents with a paperless system:
- scan each document to your computer
- save to a folder (name the folder 2013 Financials or whatever you desire)
- create a separate folder for each month within your 2013 Financials folder to save files
Invest in QuickBooks accounting software program. Computerized accounting is the most efficient and reliable system for keeping your financial records in one place and obtaining accurate financial reports. QuickBooks is the #1 small business accounting software program; its user friendly (if you have some sort of accounting background), and affordable.
3. Create an accounting system:
As business owners we tend to overlook and neglect certain duties that we know are very important because we are consumed with other tasks. Keeping up-to-date and accurate financial records is one of them. Creating a financial management system that you can commit to will help ease the burden during tax season. Depending on the volume of your financial records, you can choose to maintain your finances every month, every quarter or every week. This will help reduce the chances of making costly mistakes and having inaccurate financial records.
Preparing for tax season isn’t fun for anyone. But if you get an early start with these tips, filing taxes would run smoothly. If you are not savvy with maintaining your financial records, seek help from a professional bookkeeper. Be sure to check references.
Do you need help managing your business finances? What are your concerns?
Theresa Todman, Managing Partner at B&M Financial Management Services, LLC. B&M Financial Management Services (BMFMS) understands the challenges small business owners face when preparing for tax season.