Tax season is officially upon us so I thought it might be a good idea to review my tips for managing your business accounting!
We are getting close to APRIL 15th and that means TAXES and ACCOUNTING and all the scary things… SO, this week we are going to talk a little (teeny-tiny) bit about Accounting!!
Look y’all, I am definitely not shy about my history with accounting. I basically bought a restaurant and skipped the fancy money parts for MONTHS.
Then one day… (I thought I was so clever) I bought Quickbooks, for Mac and I just started entering things. I created accounts and entered invoices and receipts and I even entered SALES. It took me forever! Then at the end of the year I called up our CPA and was like “Heyyyyy, look what I did!”.
She just pushed it all back and said… try again. I had done 3/4 of it wrong. WRONG. That was awful. So I studied and spent a few more weeks doing it again and fixing my mistakes.
And it still wasn’t quite right but it was good enough to create the P&L and move forward with my end of year taxes. PHEW!
One of the main reasons I went into business for myself this time around was to help small businesses get through this part, and keep them from making the mistakes I made.
When I do a Business Analysis or set up an initial meeting for Marketing, I almost always tell this story!
After selling the restaurant, I went on to do the bookkeeping and accounting for our Georgetown Chamber of Commerce so I am here to say that there is a light at the end of the tunnel.
It can be done and you can even do it yourself. BUT you have to ask for the advice of a CPA you trust and you have to arm yourself with all the information you can so you can make a truly educated decision.
Here are a few of my recommendations for business bookkeeping:
One of the hardest parts about a small business is getting through the slow season, you know this to be true! Knowing what your cash flow looks like can help you weather the seasonal gaps and be READY with less stress and less FEAR!
Keep up with your WEEKLY work –
- ALWAYS be aware of your cash flow – Be prepared with good estimates for expected sales and expenses on a weekly, monthly and quarterly basis. This will help you to know when you can spend a little extra stocking up your inventory without sacrificing the electric bill.
- If you set aside 10 or 20 minutes on a weekly basis to enter in your weekly income and expenses you can save yourself the MAJOR headache of having to catch up later AND if you’re like me, the headache of trying to remember why you spent the $50 at a place called Billy’s??
- When you are done entering your transactions make sure you are FILING them away correctly and you’ll need to keep these files for 10 years. Yes, TEN!
- Keep track of invoices that need to be sent out AND the ones that need to be paid.
Keep an eye on MONTHLY work –
- Balance and reconcile your accounts – same principle here as entering in your expenses – if you get too far behind it becomes a big stressful mess.
Don’t let it get behind. AVOID THE STRESS!
- Know the situation on TAXES – do you need to reconcile and pay (file forms) for monthly payroll taxes?
If this gets behind they will charge you some pretty hefty fees so be on time here.
- Review any PAST DUE receivables – I would email or actually mail out reminders at this time too
- Take some time to review your P&L and even compare it to last year to see what is “trending”.
Don’t forget your Quarterly Filing –
- Get together your Sales Tax numbers and file them ON TIME – lots of fees here too so save money and stress and file on time.
- Same goes for Payroll Tax, FUTA and Unemployment Taxes.
- If you need to – pay attention to your income tax forms and get that settled and paid too.
Annual Accounting –
- W-2’s, W-3’s, 1099-MISC and 1096 – these forms and of course, your actual annual tax filing, are the biggies. These are things that you can do for yourself OR you can pass to a CPA if it is overwhelming BUT do not put it off. Make sure you know when they are due and that you are communicating openly with your CPA from the beginning.
- Make sure to check inventory for any discrepancies or write-offs that need to be done to reconcile the year.
- Go through any unpaid invoices and decide what should stay or what should be written off.
The biggest struggle for accounting is finding the answers you need that are specific for YOUR business.
My biggest recommendation is finding a CPA that you feel you can trust to guide you through the process of getting started or getting everything together for the start of the next year.
Quickbooks is SUPER versatile and handles so many things for your business but it is only as good as you are.
Here are a few other softwares or apps that you can use as a small business if you don’t think you are quite at “Quickbooks” level yet:
- Waveapps.com – This is actually what I am using right now for my business. It is AMAZING!! It will send out invoices for you and even sync to your bank to record the payments and expenses as they come through. So great for a small business that doesn’t need much work.
- Xero.com – this system boasts getting paid faster, integration and “real-time” cash flow information.
- Xendoo.com – this company promises double the work at half the cost. All the same basic “things” – income, expenses, monthly reconciliation and tax work – as the other systems.