The start of a new year can be a whirlwind for business owners and company executives.
The biggest task is getting financials organized and prepared for tax season, but…
Most businesses and companies wait until the last week (or day) before taxes are actually due to get their books together.
I want to share the five signs your books are not ready for tax season, and one solution to take your accounting obligations off your plate moving forward.
Let me bring your books current, deliver spot-on reports, and forecast your financial success!
5 Signs Your Books Aren’t Ready for Tax Season
Tax season sneaks up on a lot of owners and executives, but there is a way to make sure tax season runs smoothly.
Here are the five signs your books aren’t ready for tax season (and what to do about it):
#1. Transactions Are Not Categorized
Your transactions are not categorized, which causes a whole host of problems. For each categorized line item, you’re able to determine if you can deduct it from your tax liability. Moreover, unclassified items should not be used. Classify everything. Items in other, miscellaneous, or uncategorized must be classified in a real account. No more “ask my accountant” categories.
If you have uncategorized items, then your books are not ready for tax season.
#2. Negative Numbers
If you see a negative number in assets or liabilities, then something has been recorded incorrectly. Leave these negative numbers and they will affect the rest of your reporting across various accounts and ledgers. The moment a negative number shows, you must reconcile it immediately. Otherwise, you’re operating off incorrect financials, which can lead to a whole host of problems a few hours to a few weeks later.
If you allow negative numbers in your reports, then your books are not ready for tax season.
#3. Tax Planning and Preparation
If you’ve not worked with your outsourced accounting department to get your financials ready for tax season, then you’re already behind the eight ball. A tax strategy starts the day after your prior taxes were submitted. Your accountant ought to be working on your strategy all year long with every single transaction. Taxes are not a “one-week scramble” each year. Taxes are a day-to-day effort.
If you have not worked on a tax strategy, then your books are not ready for tax season.
#4. Accounts Are Not Reconciled
If your books are back months or even years, then you’re sitting on a mountain of potential financial issues. One of the biggest concerns is outstanding payables and receivables. It’s imperative you close out your books each month, so you can confidently move forward with accurate business financials.
If your books are not reconciled, you’re not ready for tax season.
#5. Balance Sheet Is Not Balanced
If you work your balance sheet and it does not balance, then you’re staring at a whole range of issues with your business financials. Balanced books show and share the performance of your company. Your balance sheet must always balance, or you’re allowing problems to exist and erode your business success.
If your books don’t balance, then you’re not ready for tax season.
I have 15+ years of experience, as the Top Rated Local® Expert Accountant, with owners and executives with $200K – $75M+ in annual revenue.
How Do I Outsource My Accounting for a Third of the Cost?
If you want to outsource your accounting and bookkeeping departments to a local expert, then let me get you caught up, manage your financial standing, reports, and forecast for a third of the cost!
I deliver spot-on, accurate reports weekly, monthly, quarterly, or whenever you like.
I reconcile and bring books current – the very first time, so you can work on growing your company instead of struggling inside of it!
I forecast your financial future so you can grow your company toward financial success.