July 7, 2022
If you’re a small business owner, there’s a pretty good chance that you keep your books yourself instead of hiring an accountant or bookkeeper to do it for you. If so, you probably dread the yearly task of getting your books in order so that you can file your taxes in April or May. Thankfully, it doesn’t have to be that hard! By following these seven tips on how to organize your books for tax season, you can get organized and get through this process quickly and easily — and never dread bookkeeping again!
Having all your books in one place is a huge plus, but without some kind of filing system you might as well have them scattered across town. Before you begin organizing your books and paperwork, create an easy-to-follow filing system that will keep everything organized and easily accessible. You could try color-coding or dividing things into sections (such as clients, expenses, income). No matter what method you choose, make sure it’s something that makes sense to you!
Label your books, label your drawers, and label all of your electronic devices. By labeling everything (even if you’re the only one who’ll ever see it), you avoid that terrifying feeling you get when looking through a drawer full of receipts or in a box full of electronics: I know there’s something in here I have to keep, but I have no idea what it is. Labeling makes every piece of paper easier to find when tax season rolls around.
The first step in organizing your books is cleaning up your email inbox. Emptying and scrubbing your inbox will give you a blank slate, making it easier to find what you need when tax season rolls around. This can be done in several ways: go through emails one by one, deleting or saving emails that are no longer necessary; unsubscribe from newsletters and updates (or use filters) so only important emails come through; and file similar emails together with labels or folders.
The easiest way to keep your books organized is by using software and apps that can help you keep track of information, such as QuickBooks, Invoicing Tools or FreshBooks. Software solutions can be expensive, but there are many free options available; choose a system that works best for you. Cleaning up your bookkeeping is one of those tasks that many people put off but having everything in order will make tax season a lot easier.
Creating electronic reminders can help you keep track of important dates and tasks. Add due dates to your calendar, enter deadlines into your To-Do list, or set a reminder for an upcoming project you want to be sure not to forget. You can also give yourself reminder notifications, so you don’t have to keep checking on them throughout the day—you’ll receive email, text message or even app alerts reminding you that it’s time to check in on those items.
There’s no way around it: bookkeeping takes time, whether you’re doing it yourself or paying someone else to do it. You’ll need a few hours every week (or every other week) just to manage your finances and keep track of where your money is going. So, start now—the earlier you begin, the more time you’ll have before tax season arrives!
Filing taxes is no fun. If you find yourself buried in paperwork and stressed out, take a break. You’ll be less likely to make errors if you approach your tax prep with a clear head, so take some time off if it looks like your workload is going over what you can handle in one sitting. Once you’ve finished and sent your numbers into Uncle Sam, pat yourself on the back—you did a great job! Now, how about taking advantage of some of those tax breaks?
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