Archive for December 2017

Resolved to be more organized in 2018?

As the year draws to a close and tax season inches closer, do you find yourself scrambling for invoices, files, and papers you cannot find? Are you kicking yourself for not completing tasks you set out to do a year ago? Are you finding there are still 100 things on your to-do list?

If so, you are not alone. But there are steps you can take at the beginning of 2018 to avoid ending up in the same situation next year, especially as related to your business taxes.

Rethink tax season

Begin preparing for the next tax season by treating it not as a season, but as part of your daily work. Make it a habit. Initially, this may seem like a hassle, but the benefit of keeping all of your documents together will create less work at the end of the year and perhaps help you file your return even earlier. Tax season will not be nearly as stressful for you as it will for most if you rethink the way you approach it.

Get organized

Start by creating a space just for tax documents in the office. Keep your invoices, receipts, and other documents in this area. Organize the space in a standard file folder system or go digital. Using a scanner or even a cell phone app can help you keep track of receipts and invoices.

If you do your own bookkeeping, try using a basic software, cell phone app, or even Excel spreadsheets to track expenses and log business activities. Keep track of these throughout the year and enter them into your accounting system. Be sure to include milage, entertainment, and even meals.

A designated notes app or just writing on the receipt can save time when reviewing receipts and help you explain how this cost was connected to your business. Having these tidbits of information organized is critical, especially if you are selected to be audited by the IRS.

Talk with a professional

Meet with your accountant throughout the year to ensure you are making the most of your potential deductions. Deductions might include car expenses, home office expenses, or startup costs.
Be sure you research and hire an accountant who best understands your business. When meeting with your accountant, they should be able to tell you exactly what documents they will need in order to complete your taxes at the end of the year. By knowing exactly what these are, you can begin to compile them throughout the year.

Share the plan

Be sure your employees who handle billing and accounts understand what is expected of them throughout the year in preparation for tax season. The entire team needs to know the plan and work together. If they don’t, you risk losing or misplacing vital documents.

If you or your employees use personal vehicles for business, you can deduct the cost of business driving. However, this can only be done if you have the records to back up the data, so tracking your business trips with an app is a great idea.

Set deadlines and stick to them

Set deadlines and arrange meetings with your bookkeeper and accountant early. Remember you are not their only client and many other people are trying to complete their taxes by the same deadline. By meeting early, you will get a head start and have plenty of time to be sure both parties have the documents they need.

What season is your business in?

It’s winter in Oklahoma, and the wind is not merely sweeping down the plains. It’s cutting through the cold, and Santa is on his way. It is the most wonderful time of the year, the holiday season. But have you considered what season your business is in right now? Is it in a season of famine or a season of harvest? Do you know how to recognize and deal with each of the seasons?

Let me tell you a story

A client came to me when his business was struggling and in a season of famine. After the struggle came 30 days of what I like to call pop bottle rocket business. Sales shoot up into the sky, and the cash comes flowing in. Excited, my client ran out and began buying a ridiculous amount of video equipment. He spent a substantial amount of money because he anticipated this season of harvest would be his new normal.

What he did not take into consideration is the changing of seasons within business. There are times of famine, when the business is slow, and times of harvest, when the business is thriving. My client did not recognize the season of harvest, nor did he anticipate that a famine would come.

By recklessly spending money, he created a season of famine. When the season of famine came, he panicked. The panic created desperation, and everyone around him could smell it.

What’s that smell?

Have you smelled your business lately? That may sound like a confusing question, but hear me out. Your business has a certain aroma you give off to others. So do you as an individual. Is it confidence? Passion? Desperation?

Desperation is evident. I can smell it miles away, and it is usually the result of a self-created season of famine. When people come to sell me a product, I often can smell desperation on them. However, there is occasionally someone who comes in with such confidence they say, “This is our product. Here is how it works, and we believe in it. If you believe in it, that’s great. If not, see you later.”

Then, they get up and walk out. Sometimes before they get in their car, I am running after them. I want to do business with them because they smell like harvest, not famine or desperation.

During the season of famine, you may be worried abut money, but be aware that people can smell it on you. If you are using too much emotional, mental, and spiritual capital worrying about money, there’s nothing left to serve clients. Plus you smell bed, and no one wants to be around someone who smells bad.

If you’re in a season of famine right now, focus on the actions that can help bring you back to a season of harvest, but be careful to avoid smelling like desperation. If you’re in a season of harvest, don’t take it for granted. Every business has a cycle, and you must to be forward thinking by preparing for the famine during the harvest.