Taxes, the word alone makes most people shudder and induces anxiety. While taxes may often take a back seat to the million things small business owners have to do to keep their business afloat, it is imperative that finances and taxes move to the passenger seat to make it a smoother ride. Planning ahead and implementing some strong strategies year-round can be the difference between more profit for you and your business versus a higher tax bill.
Preparing ahead for tax season and keeping your finances in order can help your business’s efficiency, and most importantly, save you valuable time while achieving success. Below are several solutions that you can take and implement today to overcome your biggest tax and accounting challenges.
Build a Good Internal Accounting System – It all starts from within. Setting up an internal accounting system with processes will help you keep better track of your business expenses and all your money. This will help you when thinking of long and short term strategies and decision making that will help you build a successful business. When thinking of setting up a system, consider using an accounting software program specifically built for small to medium-sized businesses like QuickBooks, Quicken, or another similar program. Skip the procrastination and schedule time in your week to dedicate to accounting and business finances to make sure you are capturing all the necessary information.
Track Spending – Get rid of that old show box with recipes and track your spending using one of the software mentioned earlier. Programs like QuickBooks or Quicken can help with multiple functions like tracking expenses and transactions, managing sales and expenses. As these programs connect with your credit cards and bank accounts, you can easily manage and input all your receipts in one place – getting rid of the headache of having to add them up one by one. It will also help eliminate the expense of paying your CPA to do all this. Another perk is that the math is all done automatically through the software. Programs like these also assist with bill paying, payroll functions and offers a reporting feature that is useful during tax time. If you are not ready to invest in accounting software, there are plenty of other apps and software like Hubdoc and ReceiptBank, which take snapshots of your receipts and helps you file and store them all in one place. Meaning, you will never have to worry about misplacing a paper receipt again.
Ask A Professional – Having a professional in your corner is not a luxury, it is a necessity. Hiring a CPA you trust and can work well with can make a big difference during tax time. CPAs can help you identify and determine what deductions and expenses of which you can take advantage. This will help you when it comes to organizing your expenses and other business-related finances. By having these pre-identified deductions in place, you will save time when filing your taxes and time upfront by knowing exactly what you should be keeping records of throughout the year.
Leave Procrastination At The Door – April 15th can be a day just like any other, or it can be a stressful, dreaded day – the choice is yours. Taxes can genuinely be a stress-free experience by allotting yourself the time to organize and ask questions before it gets too hectic and overwhelming. By pushing your deadline closer to tax day, you are more likely to use incorrect numbers or miss important deductions as you try to rush through it. Giving yourself the time upfront can also is important in case you need to have questions answered prior to starting the process. The IRS typically releases updated forms mid to late January, so you are able to start planning and your filing process as early as then. Send your CPA all your information early on and avoid being the last-minute client. If you do your taxes on your own, carve out time on your schedule early on and stick to it.
Taxes are such a dreaded task, but it is something that all of us have to do. Make the resolution to avoid filing for extensions or waiting until the deadline to file. Having a solid system in place that helps keep you organized throughout the year will be a game-changer for you and your business. Setting up a system that works for you and your business will have you loving – maybe that’s a stretch – but will definitely have you looking at taxes in a whole new, less dreary light.