Remember the old saying ‘when pigs fly’? You may have heard your parents mumbling this phrase in response to your allowance increase request. You may also recall it when you saw a casual, unwanted email promising your business 1000 new clients. And you have possibly even said it when someone recommended that you improve your bookkeeping habits in your business.
You might consider tax preparation for a part-time job. However, the key to refining your tax season experience is continuous preparation for the entire year, not just at the time of filing. Developing healthy financial habits should be engraved on the whole culture of your organization. Experiencing a heavy tax burden can help one appreciate the importance of balancing monetary responsibilities. While it may be painful, it is a reminder to adopt innovative accounting practices to secure the success of your business.
Get Rid of Outdated Accounting Systems
If you’ve been finding handling the influx of sales receipts, invoices, and financial reports challenging, it’s time to reconstruct your bookkeeping approach. Embracing cloud-based accounting software presents a practical solution, empowering you to generate, send, and receive real-time receipts and reports effortlessly. You can also synchronize the software with your bank account to send or receive payments. All of this is possible remotely, from anywhere. Developing healthy accounting habits should always be a top priority.
As these cloud-based platforms have easy accessibility and functionality, your business will habitually adapt and develop healthy accounting practices that are key to surviving the tax season.
Develop Contemporary Accounting Habits
Most top businesses today have invested in developing a sagacity among their employees to stay current and engaged. Staying in touch with the latest laws and tax changes is crucial for any business, and you must know about them in time so that something can be done before it is too late. The latest tax reforms are a contemporary example that needs to be thoroughly investigated by a seasoned team. Though you might be outsourcing your business bookkeeping, you should still try to learn about the changes to comprehend things.
Developing contemporary accounting habits also means that you stop procrastinating and start categorizing your expenses weekly. Leaving things on the back burner only causes them to add up, and when it’s time to file taxes, the situation becomes a fire drill for your whole team. Keeping a regular and consistent record of your financials will ensure that you avoid any problems.
Separate Personal and Business Expenses
Using your business account for personal use is never a good idea. The expenses will continue rising without you noticing and will eventually add up to your tax bill. You may not consider it a big deal, but it is a one-time thing. However, over a year, the expenses may accrue to be substantial. This is one of the worst accounting habits you can adopt.
Exclusively using business debit and credit cards generates a clear paper trail for bank reconciliation, streamlining the reimbursement process. Remember to go beyond just reconciling your bank accounts and ensure that all accounts with an ending balance are reconciled. It is crucial to reconcile your bank accounts, loans, lines of credit, credit cards, and payroll liabilities daily or weekly without waiting until the end of the month.
Have Your Books Reviewed by a Professional
You may consider hiring a CPA an expensive and insignificant endeavor. However, that decision can be one of the most valuable accounting habits that save you from a hefty tax burden. Just because your books are reconciled doesn’t prove that they are also accurate. Having another set of eyes looking at your financials won’t hurt you. Instead, a CPA will offer critical input, which could reduce your tax bill considerably. Because these professionals have experience looking at thousands of financials, they will surely catch any ambiguities. They can offer you valuable advice on managing your taxes in the future.
Learn more about reconciliation and proper accounting practices on the Complete Controller blog.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
