In my continuing series – Small Business Survival Basics – I will be covering small business accounting and bookkeeping. Did you know that you will be 75% done with what you need to get ready for your small business taxes if your small business accounting and bookkeeping is updated and reconciled for all of the past year’s transactions?
Here are some keys for getting your small business accounting and bookkeeping ready for tax time.
Separate personal and business income and expenses
Make your bookkeeping easy and avoid mixing business and personal income and expenses. It’s much easier to track business income and expenses in a separate bank account.
Use small business accounting software
If you are still using receipts and spreadsheets you are wasting your time. The best way to get your small business bookkeeping under control is to use small business accounting software. See my previous blog post on the top small business accounting software programs including a free option.
Download transactions from your financial institutions
Once you start using small business accounting software, save even more time by downloading transactions from your bank and credit card companies. Be aware that most financial institutions will not download transactions older than 3 to 6 months. Therefore, you should avoid waiting till the last minute to download transactions.
Getting your bookkeeping caught up, cleaned up, or reconciled
If your bookkeeping is a mess, if you haven’t updated it in several months, or if your accounts need to be reconciled then I suggest that you seek the help of an expert. See my previous post on tips for hiring a professional to help you. You’ll see that it’s worth it to pay a professional to help you to get your bookkeeping done timely and correctly so that you can get your taxes done on time.
Next time, I will cover small business record-keeping.
Here’s an infographic that you can download and save: