How to Streamline Your Business for Next Tax Season
If you paid your taxes this year, you may have realized that your organization systems are lacking. Did you have the clichť box of receipts? Did you have to spend hours calculating expenses and income? Did it take you a full day just to gather the papers and information you needed just to pay your taxes? If you answered yes to any of those questions, then now is the time to make next yearís tax season much easier.
Step #1 Look at This Yearís Tax Return
Take a look at the information you pulled together for this yearís taxes. Chances are you had:
* Income statements
* Expense statements
* Bank account statements
* Credit card statements
* 1099, W-9s or other tax forms
Make a list of all of the different types of information you have. Youíll need this list in the next step.
Step #2 Create Your Systems
Your systems may have three major components. Youíll want a place to capture or collect your information. For example, you may want to create a file folder to gather the monthís receipts.
Youíll also want a system for cataloging the information. Let technology bear the burden here. You can use something like NeatDesk to help you keep all of your information organized. You can also use accounting software to sort and organize everything. And you can use a combined approach too.
The third part of your system involves you and your actions. This is where most systems fail. If you donít follow through on the system you create, youíll end up in the same place next year. Namely, youíll spend way too much time paying your taxes. So when youíre devising this part of your system, make sure it fits your lifestyle and personality.
For example, you might decide that youíre going to enter your income and expenses and file your receipts at the end of every day. If you canít follow through on that, then it wonít work. Consider how much time this step will take and when during your day, week, or month it makes the most sense to focus on it. For example, you may decide that the first Sunday of every month is the day you file and record the last monthís information. This is something you can schedule in advance and prepare for.
Step #3 Follow Through and Assess
As you get a few months into your system, itís important to take a step back. Ask yourself what is working and what isnít. Look for ways to streamline any processes and make life easier for yourself. What can you automate? How can technology help you spend less time on these tasks?
When tax time rolls around next year, youíll be glad you took the time to get and stay organized. And if you decide to hire an accountant to manage the job for you, youíll have everything they need ready to go. Youíll save yourself time and money.