Ditch The Shoebox And Follow These Steps To Help Piece Together Your Business Financials For Last Year.
As the tax deadline quickly approaches, you may be starting to sweat a little. Bookkeeping is never an easy task, and saving all the work until the last minute can be a real pain! You swore that you would be more on-top of things this year, but yet here you are, once again facing your shoebox full of receipts. Where do you start? How can you possibly decipher all of this information and present your tax accountant with something that makes even a bit of sense?
Never fear! Here is the step-by-step method to help you compile all of your business transactions from last year and get your books ready for tax preparation.
1. Put the shoebox aside for a moment. You are wasting time trying to sort through tiny pieces of paper that may or may not remind you of what you spent money on. There are much more efficient ways to gather this information.
2. Start with your bank statements. Hopefully you have a dedicated bank account for all your business transactions (right?!). Log into your bank account, and download all your bank statements for last year into QuickBooks. Then, once they are downloaded, go through each one and make sure it’s classified properly. NOW you can use the receipts to help jog your memory if needed.
3. Do the same with your credit card statements (again hoping that you separate your personal credit cards with your business cards!).
4. If you did use your personal funds for any business expenses, you should comb through your personal bank / credit card accounts and pick up any transactions that could be business tax deductions for you. Add those manually to your QuickBooks account.
5. Now that you’ve done most of the legwork, have a professional accountant review your QuickBooks file. The accountant will make sure all the transactions are classified properly, and perform some technical finishing touches to your file (like do an official bank reconciliation, create a fixed asset schedule, split out loan payments, etc). But with the bulk of the work done by you, this should be a quick (and inexpensive) bit of work.
Follow these five steps and your bookkeeping records will be ready to send to the IRS.
Alternately, you can ditch all of these steps and just hire us to do all this work for you! By hiring us, you can ensure that your books are rock solid and ready to go. So don’t feel like you need to waste your time on bookkeeping work. Contact us today for a free consultation.