Updated: Aug 25, 2020
As a small business owner, it’s understandable that you’re going to miss a few months of bookkeeping. Your books must be missing you. Worry not! If a few months have gone by and you haven’t gone through your receipts or checked the states of your invoice, it’s possible to get catch up. You just need to be elbow-deep digging through everything with patience and a few cups of coffee.
The first step you need to do is simply to start. The sooner you get your books organized, the better. The longer you put off your bookkeeping, the more overwhelming the task will be. Especially when you’re a business owner now and there are more important tasks to boost your business going. But managing your finances incorrectly can lead your business to failure.
Imagine finally having the effort to put into managing your books, but it’s tax return deadline at the corner. Not only you have to put everything into its place, you also have to prepare your books and documents for tax. Stressful, isn’t it?
So if you haven’t started now, small business owners, I suggest you to do right away. The scenario of not doing it early is scary, and you wouldn’t want to go through that.
1. Gather your receipts
Yes, I know. Your receipts in just a few months can be thrown somewhere, be it paper or digital receipts, and they can put up a whole tower of paper already. Keeping and organizing them is one of the most tedious and time-consuming tasks in the bookkeeping process, which is why we start there. Let’s get the worst part out of the way first.
Print out your bank account and card credit statements from the months you’ve been falling behind, then collect all your physical and digital receipts for all the transactions. Best practice is to keep all your receipts in one place, but the IRS requires receipts for anything over $75, so try to keep these close in your cabinet.
After that, snap a shot of each receipt then upload it onto your accounting file so they’ll be linked to your corresponding transactions, which can be classified into spending categories.
Did you receive any payment from your customers during this time? If your accounting system allows you to send invoices, make sure that the payments you received are linked to the correct invoices and that the dates the invoices were paid out are correct.
If you still have any outstanding invoices, make sure to follow them. Don’t be afraid to send an email to remind your customers even if it’s not due. Your customers are busy, too. If anyone fails to pay, remember to keep the record of you trying to follow up with what you’re owed. You can write it off as bad debts later.
3. Collect W-9s, 1099s, and W-2s
Having paperwork documenting of who has helped you through the years is important, so that you can keep track of all full-time employees or contractors. The government wants to know, too. W-9s form will help you gather the info needed for tax time from freelancers and contractors, and when tax seasons come, you’ll be responsible for sending them 1099s. For full-time employees, you can send them W-2s to collect info, then your payroll provider will take care of the rest.
If you, as a business owner, see that you cannot handle construction accounting on your own, consider hiring an accontancy services for contractors to help you with it.
Call Irvine Bookkeeping now for a Free Quote!