We’ve heard it many times before, “your desk is a reflection of your state of mind. Scattered desk, scattered mind.” In our line of work, we’d say the same for bookkeeping. Receipts scattered in a shoebox typically leads to more disorganized books, and a less than happy bookkeeper or accountant.
Since we’re heading into our personal favourite, albeit busiest, time of year – Tax Time – here are a few things you can proactively do to support your accountant in completing your year-end taxes.
Side benefit? You’ll most likely find your business bookkeeping become less frantic, allowing you to quickly review your real-time numbers, build better budgets, and simply better equip you to grow your business!
- Committed Day and Time: Set up an ongoing schedule where you complete your monthly bookkeeping. This could be setting aside a couple of hours to a full day, depending on how involved you are with your bookkeeping (e.g. simple recording receipts versus running and analyzing reports).
- Match Your Receipts: Match your receipts for the month with your business chequing account statement. Do the same with your business credit card’s receipts.
- Record Your Data: Once all receipts have been matched and organized, enter your transactions into your accounting software, such as QuickBooks Online. And note that there are a number of different accounting software package options – it’s a matter of choosing the one that supports your needs, industry, business transaction amount, etc.
When you complete your bookkeeping on a regular basis, come tax time, the total time for your bookkeeping and numbers inputting decreases up to 50%! Not to mention, by inputting your receipts every month, you’re more likely to remember what the receipt was for (e.g. coffee with Lauren from ABC Boxes) than if you’re inputting 11 months down the road. This helps keep your books up-to-date and accurate.
Importance of Numbers
Take time to understand what the numbers in your business are telling you. If you’re not willing to do it yourself, have it done by someone who is competent in with numbers. Reasons for doing this with your business include:
- Helping to Minimize Business Misdirection: In understanding what services or products are selling best (or not at all), you’re better able to see where to spend your company’s resources.
- Understanding Your Tax Amount: By organizing your books on a regular basis, your bookkeeping and accounting can be done accurately because you have the right numbers. This helps you know you’re paying the right taxes, including your GST remittances.
Paperwork can be a monster – we’ve been cut plenty of times before by it! The trick is to be proactive in getting your paperwork organized. In doing this, you’re better equipped to:
- Make sound business decisions throughout the year,
- Potentially save money with your bookkeeping, and
- Work with a bookkeeping company who can bring more value, not data entry, to your business.
At the end of the day, it’s about organizing your receipts to see what results your business is seeing. This will help you course correct along the way or keep on sailing straight ahead.
If you’re curious to learn more about how to find a bookkeeping best practice for your business, contact us for a fun, proactive conversation!