One thing an accountant hates to see coming is a client with a box. When an accountant sees a box, the bill goes up. Accountants are paid by the hour, and going through a year’s worth of receipts takes time. This is why small business owners need to make time for record keeping.
Here are some great tips to establish a record keeping system that works for you:
Start by developing a system for organizing receipts, bank records and warranties for equipment. It can be a simple as dozen 8 by 10-inch envelopes, one for each month. Once you have source documents organized, you don’t have to keep them in reach. Just close them up, and you’re done.
Have a backup plan.
Before you throw those documents in a box or envelope, have some type of listing. Organize your documents and have a record-keeping system — it can be as simple as a ledger or a computer file. It’s also wise to back that data up in another location.
The worst scenario is not completing the first two tips. A business owner who doesn’t have time for bookkeeping should consider outsourcing. Hiring an accountant or other professional relieves stress and often saves money in the long run. The main thing is — bookkeeping needs to be done. Make a habit of record keeping.
Establish a CPA relationship.
It pays to have a CPA you can call for business advice. A CPA can look at a major purchase from a tax-wise perspective and provide legal representation on IRS issues. It never hurts to have a CPA look over what you’ve done. These professionals stay up to date on the latest laws — it’s always good to have expert advice.