For most entrepreneurs, bookkeeping ranks up there with the absolute most dreaded tasks in the business. Unless of course, bookkeeping is your business- in which case, chances are you probably don’t need to read any further!
Last year at tax time, I found myself scrounging around, digging through piles and piles of papers to find one certain receipt. Hunting through emails, looking for that invoice. Hours and hours wasted. If only there was some super obvious way to avoid all this, right?!
Well, I’ve learned a lot since then. And guess what? Doing my taxes was MUCH easier this time around (and only in part because I hired an accountant to file them for me)!
Here are a few little things I’ve learned that have made life so much easier!
1- Invest in a filing cabinet, or at least a filing box. Personally, I use both.
2- Actually use the filing cabinet. I know some people prefer to use a software program or app for bookkeeping, but it’s important to back it all up in physical form too. You can be audited for years and may need too produce those documents, and what will happen if your phone or computer is long gone by then? So use digital if you like, but print and file too!
3- Have separate bank accounts. Using your personal account for your business is probably one of the biggest mistakes that people make in the world of small businesses!
4- Keep every receipt (that is relevant), every invoice, every document you think you may eventually need to refer to. Mine get collected into an envelope to sort later (usually weekly, but sometimes monthly during slower periods.
5- Pay roll. If you have employees, track their payroll monthly- you’ll thank yourself when it is time to issue T4’s/T4a’s!
6- Stay up to date on sales tax payments (whether they be monthly, quarterly, or yearly). Most provinces/states require you to collect sales tax, and it’s not something you want to fall behind on!
7- Keep a milelage log. A lot of planners come with them included, and if not, there’s tons of free printables to be found online.
8- Print everything. Your monthly bank statements, any invoices/receipts you receive digitally, contracts, etc. Print them, and then FILE THEM.
9- Keep an ongoing expense sheet, and add to it regularly. It’s easy to forget that printer ink you bought if you don’t log it right away!
10- Update your ledger, income/expense spreadsheet, or online software to calculate your monthly net profit- it’s hard to evaluate how you’re doing when you really don’t know what you’re doing!
Follow these tips on a regular basis, and I promise you will have the easiest tax season possible! Who knows? You might even grow to enjoy (or at least not dread) bookkeeping!
