Independent business owners often find that the day-to-day operations consume most of their time. As a result, details like accounting can be pushed to the side. The catch: a business needs accurate, effective, and prompt accounting if it is to join the 25% of enterprises that survive and thrive. The good news is that hiring an NJ accountant is a sound business investment that will help position your company for success.
Thanks to the demands of your profession, you may have found yourself in a position common among independent owners: namely, your financial operations are in disarray. Today, we’re sharing four things you can do to make your accountant’s life easier. Ultimately, these measures will help us get your operations back on track as quickly as possible!
1. Isolate Your Business’s Finances
Like many small businesses, yours may have begun as little more than a bank account and an idea. The trouble with such sole proprietorships is that they leave the owner—you—open to pursuit from creditors, without the legal protections offered to businesses, and without the tax benefits afforded to corporate entities.
For these reasons, we strongly recommend that all small businesses incorporate as a discrete business entity.
2. Purchase and Implement the Use of Accounting Software
The technological advances over the last 30 years have made it possible for businesses to run paperless operations, yet we do still receive piles of paper receipts, invoices, work orders, and bank statements, all with notes scrawled in the margins.
In order to make your life less stressful and our work much simpler, prioritize the purchase and consistent use of accounting software. Most programs are user-friendly and can be licensed for a reasonable annual fee.
3. Track Income and Expenditures
Once your software is installed, use it to track your business’s income and expenditures. You can even scan paper documents into your program, eliminating what could otherwise be tedious line-by-line entry work.
Additionally, you may wish to use a corporate credit card for your operations. Many of these are offered alongside powerful analysis tools that can help you see what’s going on with your finances at any time.
4. Prepare Tax Documentation Year-Round
Year after year, we see clients scramble to gather their documentation when it’s due. It’s stressful for the client, and the level of disorganization it signals often makes it difficult for us to prepare their taxes promptly.
Instead, make it a point to have the following categories of paperwork organized year-round:
- Financial reports, including income, expenditures, and balance sheet
- Capital asset activity reports, if applicable
- Travel expenses and vehicle mileage logs
- Detailed home office expenditure report
- Forms 1098, 1099, and K-1
5. Submit Documentation Promptly
Finally, and possibly most important of all – it’s vital that you submit your tax documentation to us well ahead of deadlines. Tax deadlines should be just as important to you as payroll deadlines, utility bills, and rental payments for your business location.
By following these five recommended steps, you will be making our work here at Halter CPA far more manageable, and ensuring that our efforts on your behalf will proceed in a timely fashion.