Spring cleaning isn’t just to remove the clutter and accumulated dust from your house. Have you ever considered that your books might benefit from decluttering and a bit of reorganization and review? The end of tax season is a great time to tackle a spring cleaning of your books, particularly if preparing your taxes led you to discover you’re not as organized as you thought you were. Here are a few tips for spring cleaning that will leave you better prepared for the rest of the year and next tax season.
Consolidate or remove unused accounts
As a small business owner, you may have started learning how to keep your books on your own. A lot of keeping clean books has to do with the way you set things up in the beginning. Maybe you created multiple accounts for expenses that should go together. Consolidating these accounts will be a great way to remove some clutter and give your tax preparer a clearer picture of your expenses.
Did you start your business years ago using a vendor that you no longer use? Do you still have expense accounts that aren’t relevant anymore? You can remove those if they are no longer in use. By removing and consolidating accounts, you also reduce the risk of misclassification or confusion at tax season. If your chart of accounts is messy and you aren’t sure how to clean it up, a cloud accountant can look at your books and guide you through the process.
Review all outstanding invoices
While this is a task that should be done on a regular basis, there’s always the chance that something has slipped through the cracks. Letting outstanding invoices sit can put a strain on your relationships with vendors and also create an inaccurate financial picture that leads to budget issues in future months. If you’re struggling to manage accounts payable, a cloud accounting tool like Bill.com can help. In addition to keeping your payables straight, Bill.com offers increased security with easy-to-manage approval processes.
Review your expenses
Spring cleaning is a great time to pull a P&L (Profit & Loss Statement) to review your expenses. Going through your expenses line-by-line can help you identify areas to save money. Subscriptions set on auto-pay are notorious for being forgotten over time.
You may also have a pile of receipts sitting on your desk or in your email inbox. An app like Expensify can help you manage expenses and paper. Simply snap a picture of your receipt, and Expensify will automatically code the expense for you, preparing it for approval. This spring cleaning task will have you literally decluttering and organizing, as well as creating a process to keep those receipts in order going forward.
Review your budget
Now is a great time to review your budget. How did Q1 look? Did you stay on budget? Reviewing your budget on a quarterly basis is a great way to stay on track for the whole year. If you were well over budget for Q1, you have lots of time left in the year to make adjustments.
Check-in on COVID-related program changes
This is a big one for 2021. Many small businesses have utilized one of the COVID related stimulus programs and the requirements are always changing. Congress is continuously working out program bugs in an effort to ensure the businesses that need the funding most are able to easily access the applications and fulfill the requirements. Consulting with a tax advisor can ensure you are taking full advantage of the funding and credits available to your business.
Declutter and go paperless
When it comes to bookkeeping, we’re your decluttering specialists. Going paperless has so many advantages, including ensuring your business is set up for remote financial management. In addition to the benefits of reduced paper clutter, improved business security, and real-time access to your financials, cloud accounting will save time and reduce errors by removing the need for tedious data entry. Your back office will be organized and automated, and collaboration within your team and cloud accounting specialist will be seamless.
If you think you might need some assistance with your spring cleaning, feel free to reach out to one of our specialists. We can help you declutter, clean up accounts, and find the right cloud accounting apps for your unique business.