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Is Your Bookkeeping Ready for Tax Season? Here’s How to Catch Up Quickly

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As a small business owner, you know that staying on top of your finances is crucial for the success of your business. But what happens when you fall behind on your bookkeeping? Whether it’s a hectic schedule, confusion with accounting software, or just plain procrastination, the reality is that many small business owners find themselves scrambling to catch up on their books—just in time to file taxes.


If this sounds like you, don’t worry—you’re not alone. We have seen countless small business owners in the same position, and we’ve helped them get back on track quickly and efficiently.


In this post, we’ll walk you through why clean financials are so important, the most common bookkeeping mistakes that can leave you scrambling at tax time, and how you can get your books caught up quickly—without the stress.


The Importance of Clean Financials for Tax Season

If you’re behind on your bookkeeping, it’s easy to push it to the back burner. However, leaving your books in disarray can lead to serious problems when it comes time to file taxes.


Here’s why clean financials matter:

  1. Accurate Tax Filing: If your financials aren’t in order, it’s difficult (if not impossible) to file your taxes accurately. This could lead to missed deductions, penalties, or worse, an audit. A clean set of books allows you to file your taxes on time and with confidence.

  2. Avoid Penalties: The IRS imposes penalties on businesses that fail to file taxes on time. Additionally, inaccurate records may trigger an audit. Having up-to-date books can help you avoid these consequences and ensure that your tax filing process goes smoothly.

  3. Better Decision-Making: Clean financial records help you understand where your business stands financially. Whether it’s profit and loss statements, balance sheets, or cash flow reports, these documents give you the insight needed to make informed business decisions.

  4. Stress-Free Tax Filing: Let’s face it—tax season is stressful enough without the added pressure of scrambling to organize receipts and reconcile accounts. By getting your bookkeeping in order well before the deadline, you can significantly reduce stress during tax season.


If you’ve been putting off your bookkeeping, now is the time to get it caught up. And we’re here to help you do just that.


The 3 Most Common Bookkeeping Mistakes That Lead to Stressful Tax Filing

Understanding why your books got behind in the first place can help you avoid these issues in the future. Below are three of the most common bookkeeping mistakes we see small business owners make—and how you can prevent them:


  1. Failure to Reconcile Accounts Regularly

Many small business owners didn't realize that they needed to reconcile majoriity of their accounts, checking, savings, credit cards, and liabilities. Or they believe that reconciling accounts is a task they can put off until tax season. However, failing to reconcile your bank and credit card accounts regularly can lead to confusion, errors, and missed transactions. Without proper reconciliation, it’s easy to miss discrepancies, which could snowball into larger problems when you finally sit down to do your taxes.

Solution: Get into the habit of reconciling your accounts monthly. This ensures that your books are always up to date, and it helps you identify discrepancies early on before they become bigger issues.


  1. Mixing Personal and Business Expenses

This is a big one. It’s tempting to use the same bank account and credit card for both personal and business expenses. However, doing so can create a huge mess when it comes time to separate your personal finances from your business finances for tax filing. If your personal and business expenses aren’t clearly separated, it becomes incredibly difficult to generate accurate financial statements.

Solution: Open separate business accounts for your company’s finances. This will make it easier to track business expenses and income and ensure your bookkeeping is as accurate as possible.


  1. Lack of Proper Documentation

Tax filing requires accurate documentation for all your business expenses and income. Without receipts, invoices, and other supporting documents, it’s hard to substantiate your claims during an audit. Many small business owners fail to keep thorough records, which can lead to gaps in their financial statements.

Solution: Stay organized by keeping all receipts, invoices, and financial documents in a secure, easily accessible place. If you use accounting software, make sure you upload these documents regularly to keep your records complete.


How to Catch Up on Your Bookkeeping Quickly

If you’re behind on your bookkeeping, the good news is that it’s never too late to catch up.


Here’s how you can get back on track in just a few steps:


  1. Assess the Situation

Before diving into catching up on your books, take a moment to assess the situation. How far behind are you? What’s the current state of your financial records? Are there any glaring issues or discrepancies you need to address first?


Once you have a clear picture of where things stand, you can create a plan of action to catch up on your bookkeeping.


  1. Organize Your Documents

Start by gathering all of your statements, receipts, invoices, and other financial documents for the period in which you’re behind. If you’ve been keeping things scattered, take some time to sort everything by category—income, expenses, taxes, etc. Once everything is sorted, it will be easier to input the information into your accounting software or spreadsheet.


  1. Reconcile Your Accounts

If you’ve missed a few months or even a year’s worth of reconciliations, now is the time to sit down and go through your bank and credit card statements. Compare each transaction to your accounting records, making sure everything matches up. This step is essential for identifying any errors or discrepancies.


  1. Catch Up on Your Profit and Loss Statements

Once your accounts are reconciled, you’ll need to update your profit and loss statements (P&L). This document is essential for filing taxes and understanding your business’s financial health. It shows your revenue, expenses, and net income, giving you a clear picture of your business’s performance.


  1. Work with a Professional Bookkeeper

If you’re feeling overwhelmed by the idea of catching up on months (or years) of bookkeeping, you don’t have to do it alone. A professional bookkeeper can help you get back on track quickly. With their expertise, they can handle the reconciling, document organization, and report generation, leaving you to focus on running your business.


At Balcony Bookkeeping, we specialize in helping small businesses catch up on their bookkeeping—no matter how far behind you are. With over 20 years of experience, we know exactly how to streamline the process and get your books ready for tax season.


Ready to Get Your Bookkeeping in Order? We’re Here to Help!


If you’re ready to catch up on your bookkeeping and file your taxes on time, it’s time to take action. Whether you’ve missed a few months or several years of bookkeeping, we can help you get everything in order, fast.


At Balcony Bookkeeping, we offer flat-rate services to help you get your financial records reconciled, up-to-date, and ready for tax filing. With our experience and expertise, we can turn your disorganized books into clean, organized financial statements in no time.


Book your FREE consultation today to get started on the path to stress-free tax filing and accurate financial records.


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