It’s coming faster than any of us would like to admit - tax season. We’ve got some tips on how to get your books together, which will make it easier (and cheaper) for you to process your taxes next year!
Implement Accounting Software (If You Don't Have It Already)
If you're not already using accounting software, consider adopting a platform like QuickBooks or Wave. It can help you streamline financial record-keeping, track income and expenses, and generate reports. Gone are the days of the pencil and paper ledger!
Organize Receipts and Invoices
Organize physical and digital receipts and invoices by category, date, or expense type. This organization will simplify the process of verifying deductions. While you’re doing this, check for any missing transactions - where does it not line up?
Evaluate Outstanding Invoices and Payments
Review outstanding invoices and payments from clients or customers. Take action to collect overdue payments, if necessary. It might be a bit awkward, but will be rewarding to you in the long run of having those invoices taken care of.
Categorize Small Business Expenses
Ensure that all business expenses are properly categorized. Proper categorization makes it easier to claim deductions and track your business's financial health. Make sure you know what is and what isn’t a write-off (looking at you, David Rose from Schitt’s Creek).
Prepare Bank Reconciliations
Reconcile your bank and credit card statements to ensure that your records match your actual financial activity. Resolve any discrepancies promptly.
Plan for Year-End Purchases
Consider making necessary business purchases before the end of the year to take advantage of deductions. Consult with a tax professional to determine the best timing for significant expenditures.
Plan for Documenting 1099 Forms
If you work with contractors or freelancers, prepare to issue 1099-MISC forms for non-employee compensation. Ensure you have accurate records of payments made to these individuals. If you use a service like Honeycomb Credit that automatically files 1099-INT forms for investors, ensure that your records are accurate to facilitate this process
Preparing for Tax Season - Also Great For Preparing for Growth!
Since you’ve got your books in order now already, it’s a great time to consider launching a Honeycomb Credit investment offering to grow your business! This means that most of your application will already be figured out, and you can fly through the process smoothly and start raising money as soon as possible! To learn more, fill out the form below:
Keeping your financial records organized is definitely one of the trickiest parts of running a small business. It’s not just about avoiding chaos; it’s about understanding your numbers to make smarter decisions. I learned this the hard way when trying to put together a clear overview for a funding application. That’s when I came across service literature review, which turned out to be a game-changer for me. They helped me better understand how to structure and present my information, especially when I felt overwhelmed. If you're struggling to stay on top of your books, getting expert guidance can make a huge difference!