There are countless tasks that small business owners must juggle just to operate their business. Some of these tasks are daily operations, marketing, sales, processes, products, management and more. These tasks can become very overwhelming for small business owners. Many of the day-to-day tasks of running a small business may change or differ across industries, but accounting does not.
Every business involves accounting to some extent. Accounting that is delayed or inaccurate can become a major disaster for a business. If you want your business to grow, secure capital, or even file your taxes correctly, you need to have up-to-date books.
If you suddenly find that your finances are a mess, you’re probably wondering how you got here and how to catch up with your accounting. Choosing a professional bookkeeping service will help you grow your business and keep your records up to date.
Let’s say, however, that your finances are already a mess. There are steps you can take now to get yourself out of this financial mess before you hire an accountant.
Collect your receipts
If your receipts are all over the place, you need to get them together. All receipts, invoices and other financial documents related to your business, such as bank statements, credit card statements, business expenses, customer accounts, supplier accounts and anything else that relates to your business finances .
Reconciliation of bank accounts
Take a moment, sit down and review your credit card and bank statements. These statements should always match your business records, supplier accounts and customer accounts. If there is any discrepancy, find the error immediately. Human errors and discrepancies are common problems for entrepreneurs who do not use a team of professionals.
Personal vs business expenses
Another important step is to take steps to prevent your books from becoming even more cluttered along the way. If you’re already separating your personal and business expenses, that’s great. If you are not, you must separate these expenses to keep your books up to date. It is highly recommended that you keep all bank accounts, credit cards and other finances separate.
Accounts that get tangled up can create unnecessary stress when you’re doing your bookkeeping or taxes.
Leaving paper behind will make life a lot easier for you as an entrepreneur when it’s time to update your books. There’s never a better time than now to go paperless and transfer to digital records.
Collection of tax documents
Tax season is a very important time of year for everyone, but especially for businesses. You should gather and collect all your forms for the tax year. This includes W-2 forms for employees and 1099-MISC and W-9 forms.
Check with a professional
Once you are up to date with your accounting, we recommend that you use a tax professional to review your documents. Tax professionals can help take the stress out of tax season and help you verify your financial information related to your return.
Using a tax professional can also help ensure that your business receives the tax deductions to which you are entitled. Most tax professionals offer guarantees that they will represent you in the event of an audit.