How to Streamline End-of-Year Taxes

Taxes, there’s just no escaping them! Many business owners await the year-end with dread because they know it’s going to be a long, complicated process to get their taxes filed correctly.

While taxes are never going to be enjoyable, there are certainly several things you can do to make the process much smoother and easier. Perform these tasks to get streamlined so that when year-end rolls around, you’re prepared.

Organize your Finances

Good accounting starts with good organization, so it’s never too early to get your house in order. Start by performing an audit on all your reports and data. Update anything and populate any missing data. Organize and clearly label physical files and paperwork. You can even digitize your paper documents, always making sure they are readable and accessible. If you have any investor information, ensure you have all the up-to-date copies of documents readily available.

While this is also good practice for the day-to-day running of your finances, it’ll make finding the information you need to file your taxes go far quicker.

Factor in the Prep Time

Everyone knows when taxes are due, but hardly anyone factors in the prep time required to get the information ready beforehand. If you plan accordingly and set aside time and resources to deal with the year-end, you will have a far easier time.

Look at what you have to do and what you need to get there. Draw up a timeline of tasks and milestones that need to be completed. Allocate resources to complete each task and set aside a realistic amount of time for completion. Make sure everyone in the business knows that your financial team is busy with taxes, so they don’t pile on extra work during that time.

Utilize Technology

Accounting software is easy to use and can save you many headaches in the process. Not only does it offer a safe and secure way to record all your finances, but they are also backed up on the cloud, so you’ll never lose the data. Furthermore, the software has the ability to automate many processes, so you can be far more efficient at paying and getting paid.

Accounting software can automate the following:

With these all recorded, you can have them ready to pass along to the accountant that will handle your taxes.

Bring in those Unpaid Invoices

Start sending out reminders so that you can get any outstanding invoices paid. Ensure you send out any remaining invoices and try to get them all paid before the year-end. This way, you can include all business in your year-end accounting and lessen the requirement to label unpaid invoices as bad debt.

If you use accounting software, you can set up an automatic invoicing and reminder process, so everything gets sent to the customer on time. Otherwise, you can set up a manual process for invoicing and make sure everyone knows when and how to follow up with customers for payment.

File All Your Expenses

It can be easy to forget the odd expense here and there, but it’s important to file everyone. It helps balance your books properly. The added benefit is that the more expenses you file, the less you’ll pay in tax. Everyone likes paying less tax, so that should be a good enough reason to do it!

File your expenses as you go. Don’t wait until year-end to do them all at once. It’s far more time-consuming and likely you’ll lose a few along the way. If your expense records are up to date, it’ll be an easy process when you need the information.

Get Rid of Unprofitable Expenses

If you have investments that aren’t doing you any favors, get rid of them before year-end. Doing this will allow you to offset any gains. Selling underperforming stocks at year-end for tax gains is common practice, so make sure you’re doing it if applicable.

Consider Paying Quarterly

This is especially useful if you’re a small business. Having to pay a hefty sum of money on taxes is never easy. Most small businesses are unable to put the money aside in advance.
Paying quarterly breaks up the payment into manageable chunks and makes it easier to plan for.

If you choose to take this method, you’ll have to pay on the following dates:

Call in the Experts

It’s never easy to file your own business taxes, just finding the time to do it is hard enough. Getting a professional accountant involved is one way to make sure the project is overseen properly.

An accountant knows exactly what’s required for year-end, so they can manage the team to get the right information in a timely manner. They will also be able to advise you on how to maximize your savings and only pay what is necessary. This includes determining what tax deductions your business is eligible for.

The good news is that you don’t have to hire a full-time accountant for this job. Virtual accounting services such as those offered by Finvisor allow you to hire an experienced accountant as and when you need them. Your virtual accountant will help you successfully prepare for the following taxation items:

Finvisor experts don’t just deal with taxes either. They can take hold of your entire business financials, including payroll, HR, and benefits. This means you have someone on board making sure everything is streamlined well in advance of tax season all in one place.

The good news is that you’ll only pay for the services you require. As you scale your business, you can increase the amount of service you get from Finvisor. This is ideal for fledgling businesses and startups where budgets are a bit tight.

Taxes don’t have to be a nightmare if you take the initiative to streamline as much as possible. Get in touch with Finvisor to find out more.

To learn more about what we do, or to request a quote, contact us at hello@finvisor.com or 415-416-6682. We’re here to help you navigate deferred revenue journal entries so you can make the most of your assets!

*This blog does not constitute solicitation or provision of legal advice and does not establish an attorney-client relationship. This blog should not be used as a substitute for obtaining legal advice from an attorney licensed or authorized to practice in your jurisdiction.*

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