5 Tips To Quickly Prepare Your Books For Tax Time

As 2022 begins, many small businesses will once again have to turn their attention to tax filing season. While few individuals or business owners enjoy tax work, it can be particularly challenging for small businesses that have to prepare their books while still running their business. How can you prep your books in ways that maximize your results and get the job done as quickly as possible? Here are a few tips.

1. Leave the Receipts Aside. Receipts are an important part of taking accurate tax deductions and knowing where your money goes. But if you have a stack of receipts, now may not be the time to go through them all in detail. Instead, work from credit card and bank account statements as much as possible. Turn to receipts only when looking for specific details not available elsewhere. 

2. Reconcile Bank Statements. Business account bank statements can be one of the best resources for the harried business owner. By reconciling them with your accounting software's information, you ensure that no transactions are missed. You'll have confidence in your numbers because they match the bank's independent records. And most software can now help by downloading statements and transactions in bulk. 

3. Focus on Big Ticket Items. If you don't have time to go through every transaction thoroughly, focus on what will bring the most bang for your buck at tax time. This includes assets that can be depreciated, expenses that qualify for tax credits (rather than just deductions), and things that must be balanced (such as payroll taxes) before reporting. Talk with your accountant about where to focus your energy. 

4. Outsource the Work. The best way for an overworked small businessperson to clean up and prepare their books is to give them to an accounting professional. Not only does this save the most amount of time, but it also ensures that things are done right no matter how soon the deadline. 

5. Go Paperless. Do papers, receipts, statements, and invoices fill up your office? Consider scanning it all into a digital format. Current technology allows for quick and simple digitalization, so it may take less time than going through the papers by hand. Your accountant, tax preparer, or outside bookkeeper will also have access to everything they need to get their work done without you.

Want more tips for getting your books prepared for tax time as quickly and simply as possible? Start by meeting with an accountant who helps with tax preparation in your state.