It is impossible to know exactly how much time a small business owner should spend preparing their taxes. Some of the more organized amongst us have collated boxes of data and figures that have been kept in order throughout the year. Others… well, sometimes it’s just easier to throw a receipt into a shoebox.
But, come April 15th, the IRS will not accept a bulging box of papers in lieu of a properly filed tax return. If you want to avoid scrambling around at the last minute, hoping that you can find all of the paperwork and records that you need, try applying some time management skills to help get everything in order over the next few weeks.
Allot an hour or so every day to getting organized
While many small businesses will take their paperwork in to get prepared by a professional, it is unlikely that they have an accountant on staff and in the office to keep things together. When you run a business, you become your own accountant, IT team member, marketer, and salesperson and on occasion, one of these jobs will require more attention than the others. And, while you can just ignore that accountant role, bringing your tax preparer a jumble of numbers and papers will wind up costing you more money. They aren’t going to sort through that chaotic mess for free.
Instead, spend an hour, or maybe even a half hour, every day going through your papers and getting organized. It will be a lot easier than sitting down and tackling everything over a couple of days, and you’ll still be able to see to the countless other roles you have to fill.
Create a system and stick to it
Spreading work over the course of a few weeks does have some disadvantages since you can wind up getting lost in your own system. You might put certain deductions in particular folders, or mark them with some sort of colored tape. But if you forget what goes where, you’ll just wind up backtracking and losing time.
When you make your system, whatever that system might be, write down the rules so you have something to reference as you work through your documents. Your tax preparer will also thank you for making that reference sheet – what makes sense to one person might seem absolutely chaotic to someone else.
Make organization a habit
I know, I know – if you were able to stay organized, you wouldn’t need advice on time management. But the best possible step that you can take to stay on top of your finances is simply to try and stick to whatever system you created throughout the year.
Spend 20-30 minutes every couple of days sorting through that shoebox just to keep everything organized. If you need a bit of help, or something is confusing, you’ll also have plenty of time to research an answer, or seek professional advice. Being a business owner is hectic enough without having to re-learn the ins and outs of tax law every time you hit a financial snag.
No one really looks forward to tax season, but trust me when I say that, if there is a place for everything and everything is in its place, the whole process will be much, much smoother. The last thing your tax preparer (or you, if you do your own taxes) wants to deal with is an overstuffed box of papers, or a cluttered filing cabinet. It will be more frustrating dealing with that than it will be spending a few weeks getting everything in order. And if you take your newfound organization and time management skills to heart, you’ll be able to look with pride at your closet full of neat, collated boxes of receipts and returns.
Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Google+ and on Twitter @deborahsweeney and @mycorporation.