(Shared by Jennifer Dunn, Program Assistant, Endeavor Center, OSU South Centers)
Doing business taxes can be difficult for new entrepreneurs. In this article, I’ll share smarter and faster ways to record your expenses and keep track of your receipts and other important documents for your taxes. Each of these tips is easy to implement and should help make tax time a breeze!
Tip #1: Use accounting software to keep track of business expenses
One of the things that many small business owners struggle with is staying on top of their bookkeeping throughout the year. If you don’t use an accounting software like QuickBooks or Xero, you are setting yourself up for failure come tax time.
I’m a CPA and believe it or not, I use QuickBooks to do my books and prep myself for tax season. This makes it so much easier and ensures that you keep accurate records of your income and expenses. If you find yourself always in “catch-up” mode when it comes to your books, then you must invest in accounting software.
Tip #2: Use expense categories in your accounting software
Expense categories are just a way to group purchases that you make for your business. For example, office supplies, restaurants, and gasoline are expense categories. They can help you better track vendor expenses rather than setting up each and every vendor for everyday purchases.
The reason is that it will allow you to enter expenses faster. This will save you time and it will allow you to only keep track of the most important info required for tax purposes.