New businesses, especially entrepreneurs just starting out usually don’t have an accountant or bookkeeper. This aspect of running a business is one of the least pleasant, and putting it off can end up costing more than if one were hired or consulted from the beginning.
Why is this?
There are several reasons. Disorganized records end up taking longer to sort out and take longer to extract the financial information needed to prepare business documents such as financial statements, tax returns, sales taxes, payroll taxes, etc.
Time is money, and the longer it takes, the more it ends up costing you, your accountant or bookkeeper. Good record keeping also helps to ensure that no more taxes than what is owed are actually paid. The good news is, with the following tips, you will be soon on your way to getting your financial books in order. Let’s get started…
It’s important to understand the importance of using one’s time wisely and outsourcing whenever possible. Realistically, you can’t be an expert at every aspect of your business. If you have the ability to hire an accountant or bookkeeper, this is your best course of action.
To have access to one, especially in the beginning, is invaluable. They can assist and guide you with methods and techniques to get your business set up quickly and properly. Accurate record keeping is essential in any business. Without accurate records, the odds of failure increase greatly.
The good news is that hiring one is easy and affordable. Wherever you are, there are likely many options. Google searches for your local area or Craigslist should provide plenty of prospects to choose from. There are also many online outsourcing options that can assist you with your business bookkeeping for a monthly fee.
#2 Get Organized
Whether or not you are an organized person, this is one area where you should not neglect. Once you implement the tips from this eBook, getting and staying organized will be much easier. First off, you should plan to have a designated area where you keep your financial records, receipts, etc. Keep this area clean, and if possible, exclusive to the operations of your business. Things you will need include a file cabinet, file folders, desk, chair, computer, and general office supplies. Maintain this area and for the sake of your business, get and stay organized.
#3 File Paperwork
One of the biggest obstacles to organization in any business is paperwork. If you don’t stay on top of it, the paperwork can quickly get out of hand. Create individual folders for bank statements, paid bills, unpaid bills, paid invoices, unpaid invoices, receipts and permanent information. Create a simple system for organization so that each individual item gets sorted promptly and has its proper place so that you can find it later.
#4 Learn About Business Taxes
It’s not necessary to be able to prepare your own business tax return, but it is essential that you understand how business taxes function. If you have a prior tax return, review it and familiarize yourself with as much as you can. If you don’t understand something, you should review it with your tax preparer.
Ultimately, you the taxpayer are responsible for what is submitted to the Internal Revenue Service, so it’s in your best interest to ensure that you know what the numbers represent. Keep in mind, the bookkeeping function produces the raw numbers that are essential in preparing your business tax return and accounting fine tunes those numbers. By having an understanding of your business taxes, you will appreciate the importance of your Accountant and accurate bookkeeping.
If you would like to read the remainder of the article, please subscribe below to receive my FREE eBook, “10 Things to Do if You Don’t Have an Accountant or Bookkeeper” eBook.