Spring cleaning isn't just for your home. Your small business could use a financial spring cleaning too. This is usually the last thing anyone wants to hear around tax season. Especially if you’re not an accountant. The usual reaction to finishing taxes is to drink a margarita and get back to focusing on what you love. Unfortunately, this can cause the same cycle to repeat over and over again. So, this year, let’s try a few things to make next year less painful. Here are three quick ideas to get you started.
Make sure your monthly bookkeeping is up to date. I know this sounds difficult but it can make a huge difference at the end of the year. The preparation process for taxes is far less grueling if you’re not trying to pull together 12 months of data. It also has a lot of other benefits too. You can get a much better understanding of how your business is performing during the year. It will help you make important financial decisions confidently. It will also help you catch fraudulent charges in time to contest them. Bookkeeping to most people is about as fun as a trip to the dentist, so don’t be afraid to outsource this task, if it causes you too much stress.
Review your packages and pricing to see if changes are needed. This is a time to reflect on what was received well and maybe some things that weren’t. If you had a successful year, don’t be afraid to raise your prices. I find many business owners are resistant to raising prices, but there are only so many hours in the day and if you’re operating at a full load you can’t put more hours in the day. Working smarter and not harder is a critical element for any small business owner. If you didn’t meet your goals for the previous year, it may be time to adjust how your packages are offered.
Set aside money each month for tax expenditures. Once your taxes have been completed, you can see how much you paid in taxes and gain an understanding as to why. Using that knowledge, you can put a plan together for the coming year. Set money aside monthly to ease the pain of sending in your quarterly tax payments. If you aren’t required to send in quarterly tax payments, then it’s even more critical to set money aside to make sure you don’t have an unpleasant surprise at the end of the year. Keep in mind, if you’re doing a lot more, or a lot less business than last year, you should adjust how much you’re setting aside.
These are just a few tips to help you stay on the straight and narrow for the year. Keeping your business house clean will make life so much easier throughout the year and next tax season too!