Last week I wrote a little bit about how time was running short to make moves that can affect your tax picture by the end of the year. A lot of that was aimed at the individual taxpayer, but this is also the case for small businesses.
So if you are a small business owner, you may want to look at this recent article from Forbes.com that goes a list of things you may want to consider as you look ahead to tax planning. In this spot, I want to highlight only one part of this, though, and that is to keep on top of your bookkeeping.
I completely understand how this falls to the bottom when it comes to the to-do list for your business. You want to be much more involved in what you do for your clients and/or customers. You want to be doing what you started your business to do, and that wasn’t to go home at the end of the day and categorize your banking transactions.
But then it becomes something that suffers from procrastination. It’s not something that HAS to be done for your business to operate. You then think you can do it at the end of the week, which becomes the end of the month, the end of the quarter, and suddenly, Eek!, it’s tax season. This snowballs into many problems.
First, operating in this manner makes it impossible to really know how your business is doing. Sure, you may be doing okay enough since there is money in the bank and you are paying your bills, but you don’t have really any idea how much money you are making – and how you can make more.
Second, operating in this manner is going to make the task feel unbearable when you finally come around to the bookkeeping. You will be scrambling from behind, won’t remember what every transaction was for, and will potentially be missing out on deductions. When it then comes back around to just how much money you are making, this could again mean it is not going to be as high as it could be.
Lastly, this is going to result in you losing a sense of control. It can feel great when you have enough things to do while working in your business, you feel successful when your schedule is full. But it will feel awful when things catch up to you and you realize you have spent no time working on your business.
Let this be a call to catch up on the things you need to catch up on. This puts you in the best position to have the most success. And remember that we are always here to help you reach that spot in any way that we can.
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