Bookkeeping What To Do And When it Needs To Be Done

Bookkeeping can seem overwhelming, especially when you think about all the things that need to get done and need to get done at a certain time. Let’s simplify it and break it down into 6 things that you’ve got to do and when you’ve got to do them.

Pop into your bookkeeping software at least once a week and categorize those transactions.

Doing this weekly helps you keep a pulse on how your business is actually doing and it makes the task of bookkeeping less daunting because you don’t let it all stack up.

When you sit down to categorize your transactions is the perfect time to also store away those related receipts. 

There are all kinds of storage options. You can scan receipts and keep them on Google drive, a folder on your computer, attach them to the transactions in your bookkeeping software, or use a program specifically for tracking receipts.

You’ve gotta keep those receipts in case you get audited by the IRS so it’s best to get a system in place now.

This sounds complicated but it’s actually super easy.

Basically, you’re comparing your bank statement to your cash balance in your bookkeeping software to make sure you’ve got everything recorded. 

Most bookkeeping software has a feature that makes this quick and painless.

If you’ve got differences look for payments you’ve made that haven’t flushed through the bank yet or bank fees that you haven’t recorded in your software yet.

Bank recons help make sure your balance is accurate and so are your financial statements

Again, this sounds complicated but it’s really not so bad.

Your bookkeeping software will generate these for you. You’ll want to create an Income Statement (aka Profit and Loss Statement) and a Balance sheet.

Just do a quick review by looking at your revenue and making sure it fits in with what you sold this month.

Glance at your expenses and make sure it seems in line with what you spent this month. Something seems off?

You can easily use your software to dig into what makes up the number on your financial report.

This is a quick way to make sure you’ve coded the big things correctly.

The federal government doesn’t like to wait until tax time to collect what is owed to them.

Much like people who have taxes withheld from their paychecks the feds want us to pay some taxes as we go along.

Come tax time you’ll pay a penalty if they determine that they haven’t received enough money from you during the year.

Avoid that by making quarterly estimated payments. You can do that using this form (https://www.irs.gov/pub/irs-pdf/f1040es.pdf). 

The IRS doesn't require you to file the calculation in this form, just the payment, and the voucher.

This can also be paid online, check that out here. (https://www.eftps.gov/eftps/). 

Note that they want you to do this calculation for the whole year and make 4 equal payments.

Do the best you can, as we all know owning your own business is unpredictable. Increase the payment during the year if you end up way off on your calculation.

Every year you must file a tax return for your business.

Depending on your structure that may be a stand-alone tax return for just your business or it may mean including your business income with your regular tax return.

The earliest deadline is March 15th so make sure to get with your tax pro before then so you don’t miss your deadline.

If you’ve kept up with your bookkeeping all year tax time should be a breeze and your tax pro will appreciate how easy you’ve made their job.

Keep up with these 6 can’t miss bookkeeping activities and get back to focusing on your clients and the work you love.