How A Bookkeeper Could Save Lots Of Money On Your Taxes
I admit it.
There were MANY YEARS that I was so overwhelmed, confused, and would have huge anxiety at just the mention of money and my business.
I knew a lot of it was coming in. I knew that some months were higher and lower than others. I knew I was keeping myself above water. Although, I honestly had no idea HOW.
Just budget your money!
I would listen to people tell me ‘just budget” and make sure “you pay yourself” or “save for that.”
Yeah. Ok. But HOW?
When you own a small business and there are a million tiny pieces to the pie, where do you, the business owner, fall? Usually, the people saying that were the 9-5ers who got a steady paycheck from their boss. They couldn’t relate to me!
After all, some things are partial business expense, partial personal expense, right? So how do you account for that?
I would wonder if I were placing things in the right spot in my QuickBooks program. Hoping to God that I would notice if clients didn’t pay on time (before I accepted credit cards), or even at all! Trying to make sure I paid everything on time especially when the heavy months came about…. you know, when it seems like everything is due all at once? (insurance, registration, membership dues, and throw in a new set of tires too!)
The January Scramble To Account For The Money:
I was one of those people that when January came I would call up all my banks, ask them to send me a PDF of my transactions (bc I didn’t hold onto them each month, let alone enter them into QuickBooks), I would also call all the other reoccurring companies I have paid like cell phone, electric, car payments, etc. Then, I would simply take all those records and sit with a bottle of wine and enter them all into QuickBooks the way I thought they should be.
I would press print, and give it to my accountant and say, “I do all my own book keeping. Here are my records for my taxes.”
Now here is a really important part. So read closley, ok? My accountant’s job is ONLY to take what I give her and do the taxes. She is NOT (nor is yours) there to look over your years worth of records and go through it all. She only uses what you give her.
Just because I had quickbooks and entered information into it, doesn’t mean I knew what I was doing. Although, for the longest time I made the mistake of thinking I did.
I wish someone hog tied me up and got that through my thick head. I probably paid a lot more in taxes than I should have because of my very poor record keeping.
I know I wasn’t accounting for all the expenses I should have been keeping track of, therefor my taxable income was probably a lot higher than it should have been.
I Never Had Money To Pay Myself!
Aside from all of this – I never had a lump cash flow of money that would just be floating in my account. If I ever had a bad month or a rainy day, there wasn’t anything to fund it with.
There were times that I paid my bills on my then credit cards just to get by.
But what does a business do when they finally get their business going… the money is coming in… and they don’t just want to live for today, but live for tomorrow?
THEY HIRE A BOOKKEEPER! Here are 4 reasons why I love mine:
- We meet briefly every week. I give her my receipts, she tells me what was paid, what is going to be paid, asks me any questions she may have, and I tell her about anything coming up that I want to budget for.
- Each week she tells me if we are on, under, or above target.
- If I want to purchase something personal or for the business, I give her the heads up and most likely WE create a strategy to make my wishes come true.
- I get paid twice a month. This money is set up to be money for ME. All of my business and personal bills are taken care of and this is to go shopping, get my nails done, go on trips, save, etc. It is such a relief.
Bookkeeper typically costs about $25 to $30 an hour)
By having financial freedom in both my business and my personal, life my anxiety has gone way down. If there is one thing that is like oil and
water in my life it is finances and me. I have never been a spender, but I have always been stressed out by numbers. I feared not ever having enough.
Yes, even I have fears.
I say all of this because I want you to really understand how important it is for your business to be in great financial health. God forbid something were to happen in your life where you had to stop your business next year, would a buyer be able to have a clear financial history of where you have been and what you have done. Down to the nitty gritty details? Would they be able to compare one year to the next?
Not keeping detailed financial records for your business could cost you more in taxes, and actually make your business to appear less valuable than it is. Is that what you really want?
Let’s be good stewards of what we have now, so the future will be easier.
“If you’re a crook in small things, you’ll be a crook in big things. (Luke 16:11)”
PS – Let me mention, that when you are financially fit you are able to BLESS THE HECK out of others. No longer are you living as a slave to the dollar, but now blessing other people! Have you ever been in a position where you could help someone out? Give them the money or resources to do things that they can’t do for themselves, without any need or want for payback? It is one of the most amazing highs in life. To have the resources to change others lives. What do you think? Comment below!
What questions do you have for me about finding a bookkeeper?
