As tempting as it may be to ignore your small business bookkeeping needs, it’s worth setting aside some time to get caught up before tax season comes around.

The first thing you need to do to get caught up on your books is to ask yourself some hard questions. You’ll want to ask and answer these questions honestly:

• Do you want to be caught up in time to file tax returns by the tax deadline?
• Will the information you provide be accurate, or will you still need a help to clean things up?
• Do you have the time and the desire to take on this task?

Answering each of these questions will help you know the right moves to make next.

Getting caught up starts now

Once you’ve decided you do need to get caught up, there are a few steps you’ll need to take.

1. Gather receipts. Collect all receipts and invoices related to the business. Some receipts to look for include: customer invoices, debt collections, business purchases, and vendor bills and activity.
2. Reconcile bank accounts. This is an important step because you’ll want to identify and fix any errors.
3. Separate personal and business expenses. Without separating your personal and business expenses, you’ll risk unpleasant tax implications. Keeping personal and business expenses in the same account can result in unnecessary stress at tax time. If you’re unsure about the ramifications consult a tax professional.
4. Collect W-2s, W-9s, and 1099s. If you have employees make sure that their forms are updated. If you’ve paid any independent contractors during the year, you’ll need to collect their w-9 in order to provide them with a 1099.
5. Hire a professional. It’s a good idea to hire an experienced Bookkeeper, CPA or tax professional to review your books, financial information, and any tax deductions before you file your taxes. This step will help eliminate any errors and also help you maximize the deductions available.

Staying caught up

Once you get caught up, it’s much easier to stay caught up. It is crucial for small businesses to know where their financials are at all times, having this information regularly available to you will allow you to make smart business decisions to move your business forward. Don’t let another year lag behind, it will be here before you know it! We are here to help you when you need it, contact us anytime.