It’s tax time, and you’re behind on your bookkeeping. Unfortunately, as a small business owner, it’s on your shoulders to get ready. What are your options?
Some small business owners file their taxes with rough estimates. There are others who hurry to do catch-up bookkeeping on their own—a stressful situation that leaves room for errors with missing receipts, miscellaneous business expenses, an unreconciled bank account and credit card statements—and no idea what’s going on with their business financially.
Neither situation offers a great solution. Each can open up small business owners to the potential for tax penalties, such as for failing to pay the federal income and employment taxes withheld from employee paychecks. And, if you fail to pay your current estimated tax bill completely, there are penalties (if you don’t pay at least 90% of it).
Consider also, a recent study estimates that small businesses, on average, only make $7 above daily expenses. With that tight of a margin, you need to understand your cash flow. Intermittent catch-up bookkeeping isn’t enough to make a difference. What can you do, then, when you’re behind? Surprisingly, while catch-up bookkeeping is a culprit, it can also be the solution—but only when done right.
The Correct Way to Handle Catch-Up Bookkeeping
Ultimately, there are two steps to catch-up bookkeeping we recommend at Remote Books Online. When implemented, they put you in a solid financial position in both the short and long term.
1. Use a Bookkeeper to Catch-up Your Books
Outsourcing a bookkeeper is different than trying to handle it yourself. At Remote Books Online, we love the challenge of back-bookkeeping. There are two choices depending on how long it’s been since you’ve done your books (or if you’ve ever done your books).
You can either start with a reconciliation point—where information is entered and that becomes your true north for the books—with backup continuing and adjustments made to that “day-one point” as they are discovered. Or, have the bookkeeping service take the time to balance the books completely with the assurance that you are on firm historical financial footing moving forward.
Once that’s settled, it’s on to:
2. Continue to Use a Bookkeeper to Handle Your Expenses
You don’t want to fall into the same frustrating and stressful trap again where you aren’t ready for taxes and have no idea about your business’s financial state. That won’t happen if you turn your bookkeeping over to a service to handle it for you in real-time.
If you’re concerned about the budget, outsourced bookkeeping is a cost-effective alternative to hiring staff. In fact, Remote Books Online offers bookkeeping services as low as $95 a month by certified QuickBooks Pro and Xero-Certified Advisors. One of our specialties is back bookkeeping, where we get clients’ books quickly set up and current. Our affordable monthly rates also include the accounting software subscription fee and automated, secure, monthly bank statement downloads. You’ll be confident in your financial readiness without damaging your budget.
If you’re a small business owner who needs catch-up bookkeeping, you could try to do it yourself. Or you can do it the easy, no-hassle way that sets you up for the future. Contact us for a quote today and learn about our FREE offer and how we can quickly and easily get you caught up and back on track.