You promised yourself 2018 was going to be different. You were going to be organized this year – all your receipts would be scanned in that fancy new scanner you bought yourself in April and all your accounts would be reconciled at the end of each month. Instead, spring and summer come and go faster than your daughter’s data plan minutes and suddenly you wake up on November 1st and realize that your receipts are in 5 different shoe boxes – 2 in the garage, one under the bed, one in the kitchen, and the other under your son’s lacrosse sticks in the trunk of your car. All is not lost. Take a deep breath. Do not fret and follow these 5 steps to get your books in order.
- Let’s Get You Organized
Before you can get started you need to go on a search and rescue mission of all your documentation from 2018. Once you have retrieved all your paperwork – separate by Income vs Expenses. Then separate both piles by month.
- Let’s Get Your Book Keeping Up to Date
Next step is to get your bookkeeping up to date. Hopefully you already have General Ledger created. Now it’s time to ensure that each transaction is listed and accounted for – whether you do this yourself or hire a Bookkeeping Service (like Yield Bookkeeping) to help you get your ledger updated, it needs to be done. Once your General Ledger is completed then either you or your Bookkeeper can create a P & L Statement (Profit & Loss). The P & L will assist you delving deeper into your financial health, and help you determine where to cut expenses, make investments, and project costs.
- Let’s Calculate Your Income
Now you are ready to calculate your revenue from 2018. Did your revenue increase or decrease? Did your expenses increase or decrease? Once you are able to see where you stand on your income and expenses you can start working out your tax liability for the year.
- Let’s Review Deductions
This is where you may need help from a tax professional. 2018 brought several new tax laws with the implementation of the Tax Cuts and of Job Acts of 2017. These changes will most likely affect the way your deductions. Here are some examples:
- 21% Corporate Tax Rate
- Entertaining clients is no longer tax deductible
- The act allows for 100% for expensing for business property acquired and placed after September 2017 and before January 2023
- And so much more – we highly suggest consulting a tax professional to help you maneuver through these new laws
- Let’s Get Help
If you didn’t notice – one of the main themes of this article – only second to staying organized is that we feel passionate that small business owners seek professional help when it comes to their Bookkeeping and Tax needs. We know how much it takes to run a successful small business (we run one too!), and we want you to focus on the things you know and let us take care of your books. We know that you are hero and that your cape tells you that you can do it all, but even Batman needs Robin – and even the most successful small business owner needs a bookkeeper. Call us – YOU CAN COUNT ON US!