January is here and you may either be in the throes (and woes?) of preparing your books for tax season. If it has (ahem) been awhile since you've touched your Quickbooks account, now is a good time to start reviewing and organizing your financials. As a Quickbooks ProAdvisor, here are the three areas I recommend starting with (in order):
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Start Here to Prepare Your Books for Tax Season: Update Contact Information for Vendors and Independent Contractors
It is a good idea to review your contact information for your vendors and independent contractors and make sure you have W-9s on file. Why? Their completed form helps determine if you need to send them a 1099 for Non-Employee Compensation. And if you haven't already, make sure your employees have updated their contact information in your payroll system. Just be sure to speak with your payroll processor to ensure the W-2s will be sent to the correct address on file. Why? January begins the mad dash to send out W-2s and 1099s by January 31.
Next: Review and Categorize Your Expenses
Do you remember what that $200 expense was for back in February?
Timely review of your expenses (and keeping those receipts) will help ensure they are categorized appropriately. Once you have categorized everything, I recommend reviewing your Profit & Loss statement month over month. This can help you identify categories that seem high or low and correct any errors.
Move Forward to: Reconciling Accounts
Reconciling your bank accounts, credit card statements, and loans verify your records match the statements. In my world, bank statements are the source of truth. If you find errors, categorize them under "Ask My Accountant" for guidance. Reconciliations really do go a long way and show that you’ve taken the time to review and verify the transactions. I recommend uploading and attaching a copy of the statements to each completed reconciliation. Doing so, will ensure the document is easily accessible in case there are any questions.
Get Expert Help
With tax season upon us, it is a good idea to start preparing your books today. Contact Bandwidth Bookkeeping Services to schedule a discovery call and let us help you with your bookkeeping tasks!
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