For the multi-faceted small business owner and entrepreneur there is always that moment during the year when your business is seemingly put on hold. Make no mistake, the world keeps spinning around and ahead of you, but you’re stuck doing tax prep at a time when you should be out searching for more customer and drumming up more business. Without expert knowledge, small business taxes can be one of the most time-consuming, seasonal pieces of your business, especially if you are unprepared when the time comes. Eliminating the potential hiccups in your business tax strategy requires proper planning and concerted effort in preparing.
Here are three ways to streamline the process…
Bookkeep like a Banshee
Bookkeeping is the single most important process in prepping your business taxes. Accounting for every single transaction throughout the year is much easier if you take it a piece at a time. Proper bookkeeping gives a business owner the ability to eat the elephant a bite at a time, instead of trying to swallow the beast whole on April 15th.
Whether you bookkeep in-house or outsource it to a professional bookkeeper, having an expert on hand who is keeping track of the books not only helps with end-of-the-year tax prep, but can also be a boon in other areas as well. Without real bookkeeping it is hard to see where unexpected and costly expenses may be weighing down the business. It is also more difficult to determine areas of strength to find out where you can focus your efforts going forward. Bookkeeping may not solve all of your problems, but it will help to put your entire business in an ordered array.
Prepare Quarterly Financials
To the layperson, financial statements can be as foreign as a Greek textbook. To the seasoned business professional they represent a veritable EKG for the business. Without regular financials like an income statement and a balance sheet, you may never fully understand why you are constantly hemorrhaging or what lines of business are altogether unprofitable for your business.
Regular financial statement preparation is the solution. You will be able to pair on a side-by-side basis and compare quarter over quarter to see what demographics and seasonal changes have the largest effect on business earnings. You’ll better know what changes need to take place in structuring your company to ensure maximized profits in the future. Financials are rarely about taxes, but they can help you as you prepare your taxes by giving you the information that makes taxes happen much more rapidly.
Solicit Advice from Experts
Unless you have a certified bookkeeping, a CPA or a finance professional on hand and on the clock, you should think of splurging for expert advice now and again. Many businesses have found outsourcing accounting functions and processes has proven effective at further controlling costs and ensuring that tax season occurs without a glitch.
Experts also give timely advice and can help resolve issues when they arise; and they will arise. Some part-time bookkeepers can eventually morph into more full-time work, but until the need fully arises, each business owner can outsource and pay part-time bookkeepers to ensure financials and taxes are done in accordance with accepting accounting practices.
Taking the tax preparation burden off the back of the entrepreneur is a benefit to nearly any small business owner. As most company managers will tell you, the last thing they need or want to do during the month of April is taxes. Unfortunately, the unavoidable nature of preparing them makes the aforementioned tips and pointers quite necessary and extremely helpful.
About the Author: William Clive is a small business bookkeeping professional, helping small and medium sized businesses with bookkeeping, accounting and tax preparation.