When you are responsible for bookkeeping within your small business, there are some things to keep in mind as tax season rolls around. It isn’t always easy to take on small business bookkeeping, but when you do, you should always remember the following:
1. Track any and all expenses
During tax season, things can get a bit stressful and you may find yourself struggling and scrambling at the last minute. The best thing you can do to avoid any confusion and missed tax write-offs is to track ALL expenses, big and small, and keep them all in chronological order, so you will be prepared for tax season!
2. Plan for major expenses
You should always take certain measures to prepare for expenses that exceed your average amount. Say if you have a weekly expense budget of $2,500, you should plan for any upcoming expenses that exceed $3,000. It will benefit you greatly when it comes time for tax season!
3. Set aside money for taxes
If you know you will likely pay during tax season, you need to have a lump sum of money set aside to cover any amount that you would normally pay in. Take into account all of your expenses and things of that nature, then decide how much you will set aside!
4. Record your deposits accurately
No matter how you keep records, it is always a good idea to keep proof of your deposits, both big and small, in regards to your business account. However you go about your tax preparation, whether you hire someone or do it yourself, you will be able to breathe easier when you know all of your business’ deposits are available at your fingertips.
5. Stay on top of invoices
When you own a small business, you tend to deal with a lot of real-people clients rather than big companies– which means you may run into someone being late with their payments. No one is perfect, and sometimes people will fall behind on their expenses and be late, which isn’t always a huge problem. You just need to be prepared for when that happens. Late or unpaid bills will affect your flow of income, so it is best to have a plan for clients who are 30, 60, and 90 days late. If you can stay on top of this, you should have no problems!
6. Choose the best tax service
You can either choose to hire someone to do your taxes or you can do them yourself. Regardless of how you go about your tax services, make sure whatever source you utilize is reliable and trustworthy!
No matter how you decide to go about taking these steps, you may find it beneficial to follow them in whichever way you choose. When running a small business, things may seem difficult, but bookkeeping doesn’t have to be! If you find yourself overwhelmed by all the responsibility, you can always hire someone to do your bookkeeping for you.