As a business owner, you need to focus your efforts where the money is — attracting new customers, building your brand and fine-tuning your website. However, if your finances are not a focus as well, tax time can feel like a nightmare. Without the right preparation throughout the year, tax time may involve drowning in unorganized receipts and faded memories, facing an unwieldy tax bill or both. As a result, it's really important to understand accounting software and financial organization.
Accounting Software for Tracking
Unreported income or invoices can ultimately get you in trouble. If you fail to report income, the IRS can hold you accountable and give you a tax bill that may include fines and penalties. On the other hand, failing to report expenses makes your income look larger than it is and thus unnecessarily increases your tax burden. To avoid either of these scenarios, you need quality accounting software. Before you open your shop for business, invest in well-known accounting software that helps you easily track and keep on top of both income and expenses.
Hold Weekly Finance Meetings
Throughout the year, it's tempting to throw receipts in drawers or to commit certain expenses to memory rather than paper. Unfortunately, this approach to accounting almost certainly results in things being overlooked and forgotten.
Schedule a time once a week during which you review your finances — although this weekly time can certainly be with your accountant, you can also review everything with your accounting software. Surprisingly, you need just 15 to 30 minutes to do this, and the commitment you make will not only prepare you for tax time; it also helps you gain additional insight into how your business is performing.
Using accounting software, you can generate reports showing profit and loss, create balance sheets and more. With that information organized and accessible, you can make more informed decisions about critical business components, such as inventory, staffing, suppliers and operations.
Balance Your Finances
When you are at the office supply store with a stack of business and personal goods in hand, throwing it all on the company credit card may seem like the easiest thing to do. While it may save a few seconds at the cash register, it eventually makes accounting messy and hard to untangle.
Instead, diligently separate all of your expenses. If you can’t do that easily with separate cards, tracking your expenses, receipt by receipt, becomes even more important. Use an app that you to take a quick photo of your receipt and uploads the information to your accounting spreadsheets. Consider QuickBooks and the app. QuickBooks can connect to more than 2,000 financial institutions in the country, and you can also automatically integrate data from sources such as PayPal or Square. The more your accounting software can do automatically, the more time you have to devote to managing and growing your business.
Choose Software Carefully
There are a range of small business accounting software packages; to streamline the accounting process, so choose carefully. QuickBooks Desktop has long been a favorite of small business owners, especially those with multiple clients, vendors and employees, but if you prefer to engage in the cloud, QuickBooks Online may be the better option for you.
If you are an independent entrepreneur, QuickBooks Self-Employed offers the basic organizational tools you need to prepare for tax time and track your expenses throughout the year. Also, regardless of which type of program you select, QuickBooks stands by you as you grow with payroll, invoices and online payment processing services.
Running a business should be fun, but a few small accounting errors can quickly put a damper on that fun. Minimize errors and unpleasant surprises by using the right accounting software to track, organize and understand the big picture.
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