colorado – Incline Business Essentials

As we approach the end of the year, it’s time to start thinking about wrapping up your bookkeeping. Yes, I know what you’re thinking – “Finally, a chance to put my accounting skills to use!” But before you break out your calculator and spreadsheet wizardry, let’s talk about what this will entail.

Well, dear reader, I have some delightful news for you. As you stand on the precipice of spreadsheets and numbers, there’s a trustworthy ally ready to swoop in and carry some of that bookkeeping weight – Incline! That’s right, you’re not alone in this numerical forest. Incline will come with its accounting superpowers, ready to tackle the tangled jungle of receipts, invoices, and tax forms. So hold off on that emergency coffee order and remember, Incline is here to handle the heavy lifting. Breathe easy, keep your calculator at bay, and let’s move on to the next step, shall we?

Gathering The Essential Documents

You’ve got Incline by your side, and now it’s time to bring in the artillery – your essential documents. Think of this as a treasure hunt, only instead of a buried chest of gold, you’ll be unearthing paperwork. First things first, did you make any big purchases or sales this year? Are there any new flashy cars, fancy equipment, or items that had you parting with more than $2500? If so, you’ll need to rustle up the purchase documents. Your CPA will need copies.

Bringing in the Big Guns: Final Loan Statements

Now that we’ve dug up the treasure chest of purchase documents, it’s time to gear up for the next level of our financial scavenger hunt – Final loan statements. These are like your report cards but for your debt. They show how well you’ve been managing your loans. Only this time, instead of grades, you’re looking at the interest and balance of the loan, specifically as of 12/31/23. Your CPA will need these to understand how much interest you can write off. So, dig through your files, drawers, email inboxes, or wherever you stash these. And remember, each one you find brings you one step closer to completing your year-end bookkeeping. Put on your adventurer hat, and let’s get to it!

Time to Send Us Your Tax Documents: The Grand Finale

Now that you’ve excavated your final loan statements, and your CPA has stopped crying tears of joy, it’s time for the grand finale. You’ve reached the pièce de résistance of our financial adventure – sending us your tax documents.

Your tax documents are like the secret sauce in your financial burger, the cherry on top of your accounting sundae. They include W-2s, 1099s, 1098s, K1s, and all other tax forms that the IRS loves to pore over. So, it’s time to channel your inner detective and gather these crucial documents.

These little nuggets of information are crucial for us to help you file your taxes. Remember, like a good detective, no piece of paper is too insignificant! Send us all documents that carry the information needed to file your taxes. Your diligent documentation now could be the difference between a smooth tax filing experience and a stressful one. So let’s get to it, shall we?

Don’t be shy, send them over posthaste! Your CPA is waiting with bated breath for this accounting banquet. Remember the IRS has a knack for finding missing forms, so let’s beat them at their own game. Incline is here to help you every step of the way. So, polish off that magnifying glass and start rifling through your paperwork. Your end-of-year bookkeeping is a sprint to the finish line and you’re almost there!

If you run a business, the act of bookkeeping is essential. Let’s start by defining bookkeeping. What exactly is “Bookkeeping?”

Bookkeeping is the process of recording the financial transactions of your company. Bookkeeping categorizes the money coming into your business as income. Expenses refer to money that your business spends in order to operate. The act of bookkeeping organizes your expenses into categories that are used to file your taxes.

Now let’s talk about why this matters.

File Your Taxes

As a business owner, you will likely hire a CPA to file your taxes. You will need to provide the CPA with your income and your expenses. Your taxes cannot be filed without this information. This leads to the next important reason for keeping an accurate set of books.

Pay Fewer Taxes

This is probably the most attractive reason to have a bookkeeping system in place. Bookkeeping identifies all of your transactions so that nothing slips through the cracks. You must categorize each and every transaction that goes through your bank account. By keeping an accurate set of books, you will know exactly what you spend on gas or office supplies, or advertising. When you are gathering your data at the end of the year, you aren’t trying to remember how much you spent on that new computer or which client you took to lunch in May. Without a clear bookkeeping system, you will invariably miss out on deductions. You must have a plan and a process to ensure that deductions are captured.

Your expenses must be organized into categories approved by the IRS in order to be considered “deductions”. Without deductions, you will pay taxes on the entire income of your business. With deductions, you will rightfully cut this tax bill thereby saving you and your business money. For example, if your business brings in $100,000 without deductions, you might pay the IRS upwards of $25,000. But, if you can clearly show business expenses of $60,000, you might pay $10,000. This is a tax savings of $15K — not just nickels and dimes!

Track Your Profit

Profit is a key indicator of your business’s success. You can only determine your profitability if you are tracking your income and expenses.

Make Decisions About Your Business

Bookkeeping can help you make decisions about your business. Is it a good time to hire? Should you be increasing your prices? Are you spending too much on utilities? These decisions are guided by your business’s financial health.

Financing

In order to get financing for your business, you will need to provide the lender a set of books showing your income and expenses. Banks will require you to show your expenses vs. your revenue, otherwise known as your Income Statement or Profit and Loss. Bookkeeping will provide this report.

Catch Mistakes

Were you overcharged or charged twice for a service? Are you paying for a subscription that you are no longer using? You will catch these transactions through your bookkeeping because you are looking closely at every transaction.

Where Is Your Money Going?

Through bookkeeping, you will understand where your money is going. This will help you budget and plan cash flow for the development of your business.

Bookkeeping will save you money by saving on taxes, cutting down on mistakes, guiding you through financial decisions, and improving your cash flow. Business owners often want to do this on their own. Sometimes this works. But often the books are the piece of the business that well-intentioned owners plan to do and just don’t have enough time in the day.

Bookkeeping is essential but it does take time, pulling you away from your actual business and preventing you from focusing on your clients. As a business owner, you wear so many hats. This is one that you can easily outsource with confidence. Reach out for a complementary consultation to see if our services would be a good fit for your business.

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Preparing Bookkeeping for the End of Year: A Guide