As a small business owner, chances are you’re not only juggling multiple projects at any given moment, you’re probably wearing multiple hats as well. Be honest, haven’t there been days where you’ve served as your company’s marketing director, customer service rep, accountant and PR department, all within a few hours?
Automation is the key to getting your taxes done faster and with less of a headache. Here are our top 5 ways to quickly and easily prepare your small business for tax day this year.
1. Scan your receipts
First thing’s first – you need to ditch that mound of paper clutter that’s been taking up space on your desk. If you’re already a Shoeboxed user, you’re one step ahead! If not, consider signing up for a 30-day free trial and let us take care of all those receipts for you.
Shoeboxed lets you toss all of your receipts, bank statements, and any other paperwork that needs to be scanned into one of our famous Magic Envelopes for processing. Just throw everything in the envelope, toss the envelope in the mail, and then watch as your account is magically populated with digital data– and images of your scanned receipts!
Not only are all of your receipts scanned and digitized, they’re also searchable, editable and exportable, meaning you can create one-click expense reports based on receipts in certain tax categories.
2. Revisit your write-offs
You may think you know what you can and can’t deduct, but tax laws change every year. Be sure you’re up to date by checking out the IRS website, and think outside the box.
Did you remember to include any business-related apps you purchased for your smartphone or tablet? What about health insurances premiums paid out for employees, or yourself?
By spending a few minutes brushing up on this year’s deductions, you’ll be able to reduce the amount owed to the IRS, and even end up with a refund.
3. Use accounting automation software
Even if you have an accountant or tax professional, you still need accounting software. We like GoDaddy Online Bookkeeping (formerly Outright) and QuickBooks Online because they’re super easy to use and save you tons of time doing mind-numbing calculations. Accounting software will also save you money because your accountant won’t have to spend hours calculating receipt totals.
4. Link your accounts
Once you have automation software in place, it’s a good idea to link all of your business financial accounts within the application. Accounting software technology is so advanced, it can tell which of your purchases are deductible expenses! When you purchase office supplies, for instance, the software will automatically categorize that expense in the appropriate tax category.
But it only works if you link all of your accounts, so take a few minutes to link everything from your business checking account to PayPal. This way, you’ll get a comprehensive overview of the financial health of your small business, and it’ll be much easier to generate reports come tax time.
5. Categorize your receipts
Just as accounting software categorizes each transaction, Shoeboxed categorizes your receipts. This is done automatically, but when you have a receipt that’s illegible, it’s important to log into your account and manually categorize it.
Take a few minutes per day during the months of February and March to categorize your receipts, and you’ll be good to go long before April 15 rolls around.
What are you doing to prepare for tax day?