10 Things Every Client Should Do To Prepare for End of Financial Year

The end of the financial year is nearing, and our clients are all getting ready for the transition into tax time. As one of the premier accounting firms in Atlanta, GA, we are always thinking ahead to make the upcoming filing season as seamless as possible. Here, we list the top 10 things every client should do now to alleviate financial headaches and piles of paperwork in the coming weeks.

1. Start gathering financial statements. This includes any business credit card statements as well as statements from your bank account.

2. Calculate your total business income versus your total business expenses so that your Atlanta accountant can easily determine your assets and liabilities.

3. Track your expenses. One of the biggest frustrations for business owners during tax time is finding receipts for deductions and expenses. Start sorting through your deductible paperwork now; sort them into categories such as by date or type of expense. Organized receipts are much easier for your tax accountant to work with than a shoebox full of random expenses.

4. Download helpful apps or expense tracking software. It may be too late to help with this year’s financial reporting, but it never hurts to get a jump start on the new year. Apps are available to track deductions as you go. Examples include mileage tracking apps and programs that scan, sort and store your receipts in digital files.

5. Calculate your deductible mileage. If you use your personal vehicle for work, the miles you drive for business outside of your commute are tax deductible so long as you have records to back up your mileage.

6. Max out your deductions. This is the time to write a check to charity or boost your advertising budget.

7. Gather records of gains or losses on the sale of depreciable assets. You will need a record of the date of sale, the price you sold the assets for, any costs incurred as a result of the sale, and any accumulated depreciation of the asset.

8. Gather records of payments made to and on behalf of employees and independent contractors throughout the year. You should have a signed Form W-9 on file for all independent contractors to whom you paid more than $600. You must send out Form W-2 to your employees and a 1099-MISC to independent contractors no later than January 31st.

9. Verify that you have paid enough estimated tax payments throughout the year. The final estimated tax payment is due in January, but you may need to increase the amount you would normally pay to help reduce underpayment penalties.

10. Start talking to your Atlanta tax accountant now about any other steps your business should take to prepare for the end of your financial year. Your accountant may be able to give you tips on further lowering your total tax bill before the end of the year.

5 Signs That You Need a Bookkeeper

Solid accounting and bookkeeping is essential for business success. While some small businesses can take care of their basic accounting in the initial stages, as a business grows, its accounting needs inevitably become more complex. Invoicing, collecting payments and paying suppliers are all essential to keeping the engine of a business running, and a skilled bookkeeper or accountant can ensure that it’s all done well.

Outsourcing your bookkeeping and accounting can also allow you to maintain focus on what you’re best at: running and growing your business. If any of the following five signs have occurred in your business, it’s probably time to consider hiring a bookkeeper:

1. You’re Behind on Bookkeeping

Getting behind with accounts payable and receivable is a definite sign you’re in over your head when it comes to bookkeeping. The stress of having vendors contact you for payment as well as being owed money can take its toll very quickly. Getting behind on bookkeeping means you don’t have a grasp on the true numbers of your business; they will be inaccurate and/or incomplete, meaning you won’t be able to make informed, educated business decisions.

Not sending out invoices in a timely manner will hurt your cash flow, and being late in paying vendors could affect your supply chain in the future. Having to “chase” clients that are behind on payment will also add to your stress. Outsourcing this duty to a third party allows you to separate it out from the face and brand of your business.

2. You’ve Received a Request for Financial Statements

If you’re already behind on bookkeeping and you’ve received a request from a business advisor or banker for financial statements, this could compound your stress. Catching up on your own will require you to drop everything and devote valuable time and energy to getting your books back up to speed. This type of request could be the catalyst that compels you to hire a professional.

3. You’re not Fully Cognizant of Your Cash Flow, Profits and Losses

If you don’t have a firm grasp on how your business is performing, this is likely due to issues with your bookkeeping and accounting. Inaccurate accounts receivables means you cannot be sure if clients are late in paying you. If you’re behind in your bookkeeping this likely means you aren’t keeping good track of your expenses, which could be a big problem if you are ever audited. An accountant can help you to keep track of those receipts and expenses, ensuring that you’ll maximize both deductions and profits.

4. You’ve Hired Employees and are Not Sure How to Handle Payroll

Hiring your first employee is a landmark threshold to cross as a business, but once you do, a multitude of new accounting considerations accompany it. From employees and contractors to multiple locations and continued growth, as your business increases in complexity, you’ll have more paperwork and administration tasks to take care of. Tax laws in these areas can be complex, and you won’t want to risk handling it incorrectly. It’s also time-consuming due to the learning curve, and as a small business owner you’ll want to think twice about handling it all on your own. Daily, weekly and monthly operations will become more complex, and a bookkeeper can help keep you current and in compliance.

5. You’re Having Trouble Meeting Tax Deadlines

Scrambling to meet tax deadlines, missing deadlines or filing late and having to pay penalties are all signs that you need an accountant. While it is possible to file extensions for some deadlines, not making quarterly and year-end tax payments in a timely, accurate manner will lead to penalties down the road. Stop filing extension after extension and outsource your accounting to a qualified professional.

Efficient, accurate accounting is at the heart of every successful business. With a solid back office, you’ll have a foundation and framework for success. If your company has experienced one or more of these five issues, it’s probably time to consider outsourcing your bookkeeping. Reduce your stress levels and free up more time and energy to focus on your business by hiring a professional accountant today.