Bookkeeping, Business Best Practices
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It’s that time of year again, time to fill out your basketball brackets (what? You don’t pick winners based solely on the coolness of mascot or the awesomeness of team color? No? Just me then…), dig out your spring wardrobe and push those taxes across the finish line.
But what if tax time feels like total madness this year? You’ve gotten behind, had a huge bill or had a few creative differences with your accountant. Let’s make sure next year the only madness in your March is basketball related, here’s how.
You had great intentions, but somehow the year got away from you and here you are scrambling to get your books together so you can get your taxes filed. Talk about March Madness! And you’ve had it, this is NOT happening again next year. But how are you going to stay on top of it? Here are some handy tips.
1. Set a time each week to chip away at your books. I recommend you make it a recurring Friday afternoon activity. Right before you kick off for a glorious, work-free weekend hop into your bookkeeping software and categorize your transactions from the previous week. Just this small effort each week keeps you from getting behind and totally overwhelmed.
Not sure what all you should do when? Get my handy bookkeeping checklist here.
2. Get some help. Whether you hire someone to do it for you, or just have the quarterly accountability of a review, getting just a little bit of help will keep you from falling behind.
The IRS is a relentless jerk who demands to be paid. In all seriousness, the IRS is just doing their job and if we want to live in a functioning society we’ve got to pay taxes (I know, “functioning” can seem debatable but just roll with it this time). If you’ve got a huge bill this year and no cash, be proactive and set up a payment plan with the IRS ahead of time. They love their late penalties and excessive fees so don’t wait!
In preparation for next year make a point to set aside cash for taxes EVERY SINGLE TIME you pay yourself. EVERY. SINGLE. TIME.
And make sure you make those estimated quarterly payments to avoid an underpayment penalty at tax time. The IRS doesn’t just want their money on April 15th (or whenever they've decided the deadline is this year), they want it throughout the year.
Queen of the shoebox? Sketchy spreadsheet record keeping? Non-standard accounting software that just doesn’t cut it for your accountant? It’s time to consider industry standard software. The two most common software options, and the two that I recommend the most are Quickbooks Online and Xero.
Consider chatting with a bookkeeping pro to help you make the best decision for your business. As a bonus, bookkeepers can usually get software at a significant discount so definitely consider talking with one before you sign up.
Here’s to a completely normal, cool as a cucumber, easy as pie, tax season next year!
What issues did you run into this tax season and how are you going to make sure it doesn’t happen again next year? I’d love to know!
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