Question:
What is one way to reduce your tax liability and the bill your CPA sends you on April 15th?
Answer:
Good bookkeeping!
Small business owners often skimp on bookkeeping, viewing it as a frivolous expense. But properly invoicing customers, processing payments, tracking and paying bills, accurately and timely paying employees and employment taxes, and reconciling bank accounts are essential to growing your small business. When business owners assume bookkeeping tasks themselves, they often waste their time and talent on a task that can be easily outsourced to others.
If you find yourself behind in any of these areas, you most likely don’t have an accurate picture of how your business is doing financially at any given time. You may also find yourself missing out on business and growth opportunities because you don’t have the necessary financial reports to provide to lenders or business partners.
Sloppy bookkeeping or a lack of it altogether will adversely affect your bottom line. On the other hand, accurate and timely bookkeeping can help you plan and avoid a high tax bill at April 15th. Good bookkeeping practices also mean less time your CPA spends cleaning up your books, which in turn saves you money on the preparation of your tax return.
Your efforts as a small business owner should be spent focusing on your true passions: growing and managing your business. Millington & Co. CPA’s can help you come up with a bookkeeping plan to help you grow your business.
Cayley Allen, CPA