When is the best time to start preparing for this year’s taxes?

Scaling / April 4, 2013 / lbenetton

The next time you visit your accountant, ask what happens when somebody carries a shoebox bursting with receipts through your accountant’s door. Maybe your accountant will quietly admit that the sight of a shoebox causes tax preparation fees to double, or even triple. The elevated rate isn’t so much about earning proper compensation as it is about scaring the shoebox-toting client out the door.

Why do people stuff receipts and business records in shoeboxes? Probably because they don’t have a better system in place to deal with them.

If they did, they’d come to realize that the only real way to avoid tax-time headaches is to do taxes at the right time… during the taxation year as they record invoices issued, taxes billed and expenses incurred.

You need to do this to keep your business on track anyway, and if you set up a system like Billings Pro so that expenses are approved by somebody else, that second set of eyes reduces the chances of errors getting through to taxation authorities.

Once you close out your taxation period, just print reports to get the information your accountant needs. Billings Pro offers reports like Billed and Collected and Payments Received Grouped by Client from which you can extract revenues. The Taxes Collected report shows what amounts you need to remit, while the Expenses by category report lets you offset revenues accurately.

Billings Pro also lets you export your records to MoneyWorks or QuickBooks for Mac, if your accountant (or you) uses one of these packages for more complex needs.

You’ll need to set Billings Pro up to ensure you can correctly categorize expenses as you work, and you may need to clean a few things up when you first run your reports, but most items will be in the right places. Result: you drastically reduce the amount of time you spend preparing at tax time for tax time.

To those of you hoping for help with your shoeboxes… well, there’s always next year. And by the way, the best time to start preparing for next year’s taxes is…

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