6 Tips to Get Your Books In Order
Gather Your Receipts
Saving your receipts can be a tedious task, but it's important. You should save all your receipts and invoices related to your business expenditures. Here are some different types of receipts you will need to gather: vendor invoices, statements and check payments made.
Reconcile Your Bank Accounts
Monthly bank reconciliation is crucial to ensure accuracy of financial statements. During the reconciliation process, steps need to be taken to ensure each transaction from your bank statement matches with your books. Identify and fix any discrepancies to ensure that your bank and credit card balances are properly reconciled.
Separate Personal Expenses From Business Expenses
We can't stress this enough. Commingling your personal and business expenses in the same account will raise red flags and result in you being held personally liable for your business’s debt and actions.
Going green will guarantee that you don't spend extraordinary amount of time compiling your information and it's better for the environment. It will also make your life easier. We recommend you use tools like Shoeboxed to scan/document your receipts. And, it will automatically create expense reports from your uploads.
Collect W-2s and 1099s
If you hire employees or contractors, you are required to file W2s and 1099s. The deadline for filing these reports is due by January 31, 2019. Late filing may result in penalties, so as a business owner, you definitely want to be sure to stay in compliance.
Have A Tax Professional Review Your Expenses
We understand some business owners prefer the DYI approach when it comes to accounting and filing taxes. However, we strongly advise that you hire an experienced CPA to review your books, tax deductions, and any other financial information relevant to your tax return, before you file your taxes. This helps to eliminate errors and ensures that you're taking advantage of all the deductions available to you and your business.
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