Spring-cleaning for most households means major dusting, decluttering the closets, and clearing out the kitchen cabinets. However, if you own a business, no matter the size, tidying up your finances and all the paperwork that goes along with them is a must from time to time. Here are 5 easy-to-accomplish tips for getting back on top of this seemingly daunting task.
1. Plan for Future Tax Seasons
It’s never too early to start planning your company’s upcoming tax strategies! With a business, there are several tax deadlines and needs to be met throughout the year. Make sure to do your research for the dates of various filings for your business for the upcoming year. This will assist with knowing what records to gather and when to remain in compliance. Consider the following:
- Structuring transactions to maximize tax savings
- Structuring business activity and ownership to minimize tax impacts
- Tax-loss harvesting: Involves selling securities at a loss and using such capital losses to offset capital gains in taxable investment accounts and help lower your taxable income.
- Tax-aware asset allocation: Different kinds of accounts are taxed differently. A tax-aware asset allocation strategy that accounts for those differences may help to increase after-tax returns.
With The Morrison Firm specializing in all your business taxation needs, we can find a tax strategy that perfectly fits your company’s financial goals.
2. Toss Out the Outdated Paperwork
We get it, having a hard copy of financial statements meticulously filed away can carry peace of mind for some people. However, most financial institutions now allow for paperless billing, emailed notifications, and online accounts that can be used to create dated reports at a moment’s notice. Also, for records that may be outside of the date of when your financial institution started keeping everything under your online account, many allow for you to upload those important documents into a secure digital vault.
By going paperless, you keep all your statements at your fingertips without having to take up room around the office to store the physical records. This option is eco-friendly and can bring additional peace of mind knowing that they are in one place any time you need to pull information. Also, keep in mind that records that any business should keep either digitally or by paper record include: the past seven years of tax documents and documents related to active loans and capital assets.
3. Streamline Your Accounts
Some find it difficult to keep track of all the various accounts it takes to run a business. Checking and savings accounts at one bank, a brokerage account through another institution, and possibly a retirement account through someone else. Needing to keep track of what institution handles what can feel extremely disorganized and cause additional stress.
Consider consolidating the accounts into a smaller number of institutions. This will help you have a clear visual of where your wealth is. There are sometimes incentives for having varying types of accounts through several different institutions. If that is the case, you may consider pursuing some digital tools that allow you to link several accounts to one platform for easy viewing. You may also consider obtaining an experienced accountant to help you track where your money is going.
4. Organize Your Income and Expenses
Taking a close look at your business’ monthly finances can be exceptionally eye opening when trying to cut back on unnecessary expenses. Once you sort through the monthly income and expenses for your business, you can more easily see what your budget should truly be to stay ahead of the curve.
Only budgeting will allow you to successfully plan for your short- and long-term business goals. With a trusted accountant and bookkeeper assisting with tracking your company’s finances, you will be better able to plan for any financial situation that comes along.
5. Declutter the Debt
Does your business have different types of debt through various financial institutions and all with different interest rates and payment dates? Keeping track of all that information can be a headache and stressor when there is already so much more to focus on. It may be time to consider consolidating those accounts. Paying off various debts via a single loan with a competitive rate can take a huge weight off your shoulders. This option can help you save money as well as only having to remember a single monthly payment. Your CPA can help you find the right option for your specific needs!
Even when working through the above small, yet mighty, steps to help clean up your business finances, the overall task can seem a bit overwhelming. Having a knowledgeable accountant on your side can provide peace of mind in knowing that your finances are being handled with care and with the intent of helping your business continue to thrive. The Morrison Firm is here to assist with all your accounting, bookkeeping, and taxation needs! Give us a call today to let us know how we can help you get back on track or continue the path to financial success.
