Now that the smoke has cleared from the flurry of tax season, it’s time to take stock of your business and do a little financial cleanup. Any improvements you can make in the way you approach accounting this year will take a lot of the stress out of next year’s filing process.
If you don’t have a way to file and record every expense and sale as it comes in, you’re missing out on critical business data. Use the time after tax season to set up a more consistent method of bookkeeping. Whether you prefer to use a ledger, a spreadsheet or accounting software, closing the functional gaps in your financial system means that you won’t have to waste time next year trying to find the numbers you need to complete your tax forms.
Business circumstances change over time, and your budget needs to change along with them. Look over your most recent plan, comparing your estimates and projections to actual profit and loss numbers. As you analyze your cash flow, note how much you set aside for taxes versus what you actually paid. Take this into account as you work up a new budget to ensure that you save enough for next year.
Most business owners are unaware of what can be counted as a deduction. Make time to talk with your accountant or financial advisor about how to maximize savings. Learn about all the relevant deductions available, and start recording these expenses along with other tax information. Record even transactions that seem inconsequential so that you don’t miss out on anything you’re entitled to.
If you spent hours agonizing over this year’s return and wasted valuable business time trying to navigate through a quagmire of confusing forms, it may be time to hire an accountant to handle your finances. Free yourself up to run the company by outsourcing the tasks that take up the most time or that give you the too much trouble.
Sometimes you’re lucky enough to get money back instead of owing, but before you run off to make a celebratory purchase, consider how you could use your return to benefit the business. Is there new equipment that would increase efficiency? Can you spread the money out over the course of the year to pay off debt? Putting the return to practical use may not be exciting, but it could be just what your business needs to move to the next level.
Taking a more organized and balanced approach to your business finances not only makes it easier to prepare your taxes but also supports the ongoing health of your business. You’ll be better able to monitor income and expenses, manage savings and stay on top of any potential problems. If you’re diligent with your record keeping, tax time next year will go by without hassle.
At Verdeja, De Armas & Trujillo, LLC, our team of Miami accountants is dedicated to providing personalized, financial guidance. We provide accurate and comprehensive financial statements as well as in-depth business analyses. Contact us today for a consultation!