Stay updated on all areas of tax filings and business processes affected by COVID-19

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Collaborate With Your Accountant

We have just finished the longest tax season in history on July 15. During the tax preparation process, many small businesses were reminded of the need to get their books in much better order. In addition, accounting professionals cannot help businesses analyze their operations without timely, properly prepared financial reports. August is the perfect month to get your books cleaned up, current and structured in a beneficial way to help you manage your business. In a year like we are having with the pandemic’s disruption to our economy, there is no better time to collaborate with your CPA.  

 

What will your CPA or accounting professional review in assessing your bookkeeping system? Certainly, reconciliations of bank and credit card accounts are at top of the list. Another is separation of personal expenses from business expenses. This issue will drive your accountant crazy every year they have to deal with it.

 

Not having the proper chart of accounts setup to record your transactions is another common area of neglect. And in this day and age, are you making use of the efficiencies available with cloud-based accounting applications?

 

Although commonplace, having an out-of-date accounting program is inefficient compared to today’s modern versions and may also open you up to security concerns. Using a cloud-based accounting application, such as QuickBooks Online (QBO), that is continually updated and upgraded will keep you and your accountant at the cutting-edge of technology. You will always have the latest version.

 

It is best to obtain QBO through your accounting firm who can provide it to you at a wholesale price and, of course, help you set it up properly. Not only that, your accountant can periodically do the reconciliations, reclass improperly recorded transactions and produce financial reports at the same time you are recording and paying bills in the system. It is very convenient to be able to collaborate with your accountant in real time while you both are working within the application from your respective places of business.

 

Many times I have tax preparation clients comment on the bottom line on their Form 1040 Schedule C for sole proprietors and ask, “so that is how much I made this past year?” If you want to be on top of managing your business, that question should never be asked once a year and several months after the fact. It is best to make the modest investment and get the right accounting application in place, properly set up and a system for using it to its fullest potential.  

 

Training from your accounting firm is very important. Your accountant can help course correct your way of doing things and help make sure you understand your business’s finances. If bookkeeping is not your balliwick, you can partially or fully outsource your business’s back office bookkeeping function to Equus Advisors. Go to the EquusCPA.com website to learn more.    

 

Please stay safe and enjoy the outdoors in the Finger Lakes!