Written by Gigi Guyton, Southern Region Microenterprise Specialist and Regional Manager
Now that tax season is behind us, many small business owners are probably thinking, “Thank goodness that’s over! Now let’s just focus on summer in Maine.” But guess what, we’re already into the Second Quarter of 2017. If gathering your 2016 tax info and getting your small business taxes filed was a pain, start getting your 2017 books in order now. It’s never too late to form good bookkeeping habits.
Here are seven things you can do now to ease any burden later:
1. Establish a bookkeeping system that works.
Whether you use business software, or a pencil and ledger, hiring a bookkeeper is money well spent. A bookkeeper can do the data entry for you, or at least set you on the right path to do it yourself.
2. Make sure you are keeping your business and personal banking separate.
Mixing the two gets confusing and almost always results in sloppy books.
3. Reconcile all of your business accounts monthly.
Discrepancies can be spotted immediately, but more importantly, reconciling your withdrawals and deposits forces you to keep your bookkeeping current.
4. Invoice regularly and keep an eye on your accounts receivable.
Having clients owe you money for services at the end of the year isn’t the same as having money in your business account. Remember, you’re a business, not a bank.
5. Keep up with your accounts payable.
Putting these bills and their due dates on a calendar reminds you of when you need cash the most, but can also keep track of money spent.
6. Keep and organize receipts.
Every missed business expense is money on your tax bill. Drop them in a colorful box, have your bookkeeper record items monthly, or do it yourself. If you are more tech savvy, check out receipt capturing apps out there.
7. Keep track of business miles.
Again, there’s software for this, but at the very least, keep a notebook in your vehicle and log beginning and ending mileage with notes. Capturing your business mileage can result in big tax savings.
Accurate bookkeeping is an important part of business ownership. It prevents problems, helps you monitor the progress of your business, and eases any headaches at year-end tax time. For more information about keeping good records, visit the Small Business and Self-Employed Tax Center on the IRS website.
Are you interested in learning more about managing and growing a business? Please check out our tuition-free classes and workshops.