Running a small business often means juggling finances in order to make ends meet. You’ll have employees that wear a lot of different hats, you’ll have to rely on software to make your operation more efficient with less head count, and you’ll definitely need a line of credit with a bank to ensure that you can keep the doors open even when sales are slow or clients fail to pay you in a timely manner. So you can’t afford a flub when it comes to your annual taxes. You need to use your time off at the end of the year to get all your ducks in a row so that you can file in an expedient manner and get all the money your business has coming back to it, or at least find out what you owe early so that you can get your payment in on time. Here are just a few year-end accounting tips that will get your small business ready to file.
- Collect and organize receipts. As a business owner you no doubt realize how important it is to track your income and expenses, just in case of an audit. But if you’re the type to throw all of your receipts into a shoe box for your accountant, it’s time to get organized. You might try instituting a system of envelopes by month to make it easier, but a better solution could be an accounting app that allows you to take pics of your receipts and store them by date or category so that all you have to do is print everything out at the end of the year for your accountant, saving you time and money.
- Know your deductions. If your business brings in a tidy profit, deductions will help to reduce the amount of money you owe the government come tax time. So it’s important to understand every expense that you can write off, such as leases on buildings and work vehicles, the cost of office supplies and equipment, and more. Talk to a qualified accountant to make sure that you’re getting all the write-offs your business is due.
- Shuffle income and expenses. Most small businesses operate on a budget that entails not only income and expenditure, but also a revolving door of money you owe to vendors and money that is owed to you by clients. If it so happens that you’re having a banner year and you need to find ways to cut back so that you don’t owe a ton on taxes, you might want to push off anticipated income until next year while paying off debts today. When you’re spending more and making less it should help to temper the amount you owe for the tax year, and potentially help you to stave off ruin if you don’t do so well in the coming year.
- Consider charitable contributions. One great way to do something for your business and the community that supports you in one stroke is to contribute to local charities. You can write-off the contributions and use the act of giving back to raise awareness of your business with the consumer public.
- See your accountant early. Unless you plan to earn a bachelors degree in Accounting any time soon, it’s in your best interest to hand over the task of completing your business taxes to a qualified professional. And it’s important to schedule an early visit to get the ball rolling, correct mistakes, and make sure that you have all your paperwork compiled. This will not only ensure a speedy tax filing and return, if you’re due one, but it will also leave you prepared in case of an audit.