Throughout the past 10 years I have been involved with businesses and their year-end cycles. I have prepared income tax for businesses and am a business owner myself. Each business sets up their year-end schedule different. Some like to follow the calendar year, while some prefer to offset it. As year-end is fast approaching a lot of business owners are preparing to get ready for their year-end paperwork.
For larger companies, a lot of times there is a book keeper who handles the day to day accounts receivable, accounts payable, payroll and is able to compile everything for an accountant.
Then there is us ‘little ones’. I don’t mean that in a bad way at all – as I’m a ‘little one’ myself. I am the person behind my accounts payable and accounts receivable. I don’t have payroll to worry about. The plus side to being a ‘little one’ I that I don’t have a whole lot of stuff to track. The downside – it’s all on me to make sure it’s done and ready for taxes.
You would think after 10 years of doing business taxes I would know to keep my stuff in order and be prepared. I have found that although I know how I would love to see things get handed to me for an income tax report, I don’t have them ready. This year I have decided to set myself up better for this year’s return and for the years to come. Each year my business grows. I don’t see myself becoming big enough to need a book keeper in the near future so this means I need to find something to keep myself organized and I need to do it now.
What does my system look like now?
It’s all on my computer. My entire incoming/outgoing are saved through online banking and PayPal (as that is our major payment source). All receipts – they are here, there, oh maybe some over there. Yep I’m THAT organized this year. What this means for me? I will be spending way too many hours printing way too many papers and scrambling through way to many boxes, envelopes, piles trying to find what I need.
With my goal being to make it more organized, I’m going with a simple system.
- I have an external drive to keep a copy of all of my statements, bills, receipts on. The chances of the bank crashing and losing everything are slim…but it is still there. I can’t afford to get audited two years after the bank losing everything. And lets face it – it is my responsibility to have it so I better make sure I do.
- I am also setting up a binder with three envelopes in a pouch and one pouch per month. Each envelope will be labeled. One for incoming, one for outgoing, one for statements. This will give me a dumping ground for all that paperwork I know I’ll need but don’t know where to put it.
- And the other thing I am doing – not that it will help me this year at all. But I’m taking pictures of what I’m doing this year. Just a quick couple of my ‘piles’ and adventures on the way through. Not that I particularly want to go through it again, but because I want something to look back at. So that next year when I start getting lazy and something slips I have something to look at. I’ll remember that I don’t want to repeat this year and that will be the bit of motivation that I need to keep organized.
While I am spending my many hours preparing for year end – I’m sure I’ll have some of you amazing business owners doing the same thing. Hopefully some of you are already more organized than me. And maybe with sharing some tips and tricks that work for you, all of us can be better prepared next year!