As we head into tax filing season, a lot of entrepreneurs are scrambling to get all of their financial information. Credit card statements, bank accounts, PayPal transactions, fifteen excel spreadsheets, not to mention trying to remember what that $62 charge was back on January 9 of last year…the whole process can seem overwhelming.
And on top of that, you may be trying to find a tax accountant only to find out that they are super busy and don’t get back to you right away.
What if I were to tell you that it didn’t have to be this complicated?
In fact, waiting until tax season to organize your financials is probably the worst decision you can make for your business. It’s like waiting until you get your report card before you start studying for the exams in class.
The purpose of accounting is not just so you can file taxes. Staying on top of your books throughout the year is crucial to being a successful business owner. If you do wait until tax season to organize and analyze your books, you’ve wasted an entire year to create a financial strategy to improve your business.
If the report card analogy didn’t work for you, think about only getting your eyebrows done one time per year.
You just don’t do it.
Not only is it more painful when you finally do get it done a year later.
But, you’ve also missed out on a whole year of beautiful pictures with gorgeous brows. #Sadface.
The same goes for your business finances. Accounting needs to be taken care of throughout the year so that tax filing is actually enjoyable and so you can make good decisions about how to best grow your business while staying financially secure.
For more on the basics of bookkeeping throughout the year, check out this helpful guide for small businesses by Xero.
Take action now! Review your financial transactions made thus far this year. Check to see how much you spent on your business versus how much you made. Are you on track to earn a profit?
Let us know in the comments below!