As the calendar page turns to show us it is December – which, by the way, happens every year – we see and feel the anxiety levels start to kick-in for business owners and their tax professionals. (Yes, even tax professionals get anxiety) Wouldn’t it be great to change this annual occurrence of anxiety with just a few simple steps?
Your anxiety can be eliminated, if you choose now to implement these five steps. How different would your business be IF….
- Your recordkeeping is current and ready to hand over to your tax professional by the first of February
- No piles on your desk; all receipts neatly filed using your paperless tools
- By working on your business each week you are in the know and proactively running your business
- Your tools work and whenever possible you have automated the recordkeeping
- You are playing in your strengths and use outsourcing to do the tasks that fall outside of those strengths
Implement these five tips by next December and your year-end recordkeeping will be dialed in and you will no longer have anxiety about the potential tax situations that show up come January.
Creating a habit to make time to work ON your business rather than IN your business is key. No more late night updates that just apply a band-aide to your recordkeeping needs. Taking a more proactive approach is KEY to this change. Our suggestion for all of our clients is to make ½ to one full day each week your business development day. If you don’t prioritize taking care of your business the simple truth is there eventually won’t be a business.
Anxiety is mostly driven by the amount of paper a business owner has on their desk at one time. What is the best way to deal with the paper without ignoring it or losing track of key information to run your business?
- First look at what tools you are currently using and evaluate how those are doing. We could recommend all kinds of super cool tools but a brand new shiny tool isn’t the cure. You may already have something that will work that you spend most of your time IN that you may just need a little training and assistance to fine tune it.
- Invest in a scanner that will allow you to auto feed the documents from the top and takes multiple sizes – that means no flat bed scanners. Whatever tool you end up using you will at least have a scanner to help make the process easier.
Recordkeeping is the process that collects your business bookkeeping items and record by data entry into your accounting tool. Most of this can be automated depending on the accounting tool you use. Learn how to use your tool(s) or work with a consultant to find a new tool that will work for your needs.
Yes you can do your own recordkeeping. Here is the key though, is doing recordkeeping (aka data entry) your strength and the best use of your time? Most of the business owners we work with, the answer is no. If this is true for you then outsourcing will immediately reduce the anxiety in your recordkeeping.
Planning should not only happen when you meet with your tax preparer once or twice a year. We actually recommend taking a more proactive approach and start the planning monthly. This final step takes a little guidance and set-up. We recommend reading “Profit First” by Mike Michalowicz or contact us to schedule 2015 planning session.
- Recordkeeping is updated at a minimum monthly but you will see better results if you incorporate it weekly and pay your expenses twice a month and eliminate all debt.
- Change how you deal with cash. Most businesses chase sales to cover expenses leaving very little to nothing to cover taxes or pay the owner. What if you made those things a priority, first? Immediately set aside funds for taxes, owner pay and profit (aka rainy day funds) and the amount remaining is to pay operating expenses. This is where the help kicks in so seek out assistance as needed.
If the anxiety is bad enough and you believe that it can and will change, it will. Connect with us to schedule a consult to create the action steps required to make the change a reality.