Don’t forget – the federal tax deadline is coming up on May 17th! Is your small business’ bookkeeping up to date and ready for it?
If you’re not sure, here are 5 quick tips on how to double-check – and get up to speed!
(1) Are your personal accounts (and expenses) mixed in your business records?
Do you have personal accounts connected to your business Quickbooks? Or a lot of personal expenses running through your business accounts? Both are big no-no’s! Try to keep them separate – and make sure all personal expenses are correctly categorized as “owner’s draw” if an LLC or “Shareholder’ Distribution” if a corporation
(2) Got a lot of negative numbers?
Now, for your loans and other liabilities, this is ok. But otherwise, this is usually a red flag, especially when it comes to the assets for your business! Always dig a little deeper into negative numbers to figure out what’s going on
(3) How old are your unpaid invoices – both for clients + vendors?
There are a couple of reports you can run for this: the “Customer Balance” and the “Vendor Balance” report. What invoices still have outstanding balances? And how old are they? If you’ve got a lot +90 days past due, you probably have some updating to do!
(4) Are your expense categories consistent? 🔁
First, pick a regularly recurring vendor – this could be anything from frequent Uber charges to monthly electric bills. Are all your Uber charges under the same expense category?
(5) Do you have a lot of “uncategorized” items?
Look for “uncategorized income” and “uncategorized expenses” on your Chart of Accounts. Do you have a lot of transactions in there? Then your monthly reconciliations are probably out of date – and you’ll need to catch up to get them in the right expense categories. (Same goes for your “Miscellaneous” and “Ask my accountant” accounts!)
All pretty easy to check, right? (BTW We’ve also attached an article with more helpful info about this!)