Small Business: 5 Tips/Tricks for Tax Time!

Like always, I am a photographer…. however, this can go towards ANYONE that is running a small business. It is that time of year where are world is driven by deadlines from the IRS. Tax time! January means prepping 1099s to go out the door, getting all your previous years numbers in order to file a tax return to pay Uncle Sam. This is going to sound weird, but this is the part of my business that I LOVE! Yes, I am aware that I am probably 1 in a million. I am a numbers gal (degree in finance) that turned to the arts and a made a business, so understand that I am a bit rare in our industry. I am going to give you 5 tips that I use in my business to make January actually something that I look forward to because I have everything in order.
• Dedicated Days: Staying on Top of it! This is SOOO important. Every other Monday I pay bills, enter invoices, and reconcile bank accounts and credit card statements. If you are a procrastinator, then this is where you have to stop. Every other Monday on my calendar is accounting. Some people outsource this but I really recommend it because this is something that you learn to do on your own, unless you are running at high volumes. You are not just a photographer, but a business owner, and knowing your numbers is going to be imperative to your success. For me this takes no more than 30-45 minutes. I also have 4 days a year where I do quarterly duties such as paying sales taxes, and again this is also on my calendar so I do not forget. When you decide to start a business you are then responsible for paying quarterly sales tax, collecting information for 1099s, and paying taxes. This has to become something you know and understand…period. Set reminders in your calendar and literally put accounting days on your calendar. You have to hold yourself accountable!

• Systems: QuickBooks, ShootProof, ShootQ… I could not run my business while managing a family without having systems in place to make my life easier. Although I do not outsource my bookkeeping, these systems all keep me on track, organized, and also give me a place for reference. First, you need a system to organize your numbers and send invoices. I choose QuickBooks because I think it is easy and so widely used. I would say if you have not chosen a system yet, speak to your accountant first on what they recommend and make sure whatever you choose is compatible with their workflow. At the beginning of the year, I backup my QuickBooks Company file, send a copy to my accountant, and she sends it back applying all taxes, depreciation, and double-checking everything! This is so easy! All my prints and products that clients order come through ShootProof. When using their dashboard, you can double-check and enter invoices into your accounting software. ShootQ is another system that ties in. I use ShootQ to sign contracts, and it automatically sends reminders for payments to clients. Again… a system that keeps me organized!

• Consistency: Whom do you use to print albums, prints, etc. Choose vendors that you will be using for your business and keep it consistent. Once you enter the initial information, it will then auto fill and make everything a lot faster, so all you have to do is modify numbers and dates. This is going back to the first point of being consistent on entering, paying, and filing etc. on the dedicated days!

• Professional: Hire an accountant. In a nutshell, this is so important to make sure you are staying on track. Laws change and requirements vary from state to state. It is important that you hire a CPA that understands you personal assets and your business. A lot of accountants will even help set up QuickBooks and give you a short training lesson so you can stay on top of it. Again, if you are high volume, then outsource your bookkeeping and just keep your eyes on your numbers monthly so you know the state of your business.

• Mileage: This one “me no likey”…. It is the biggest pain in my side. Again, the requirements can vary state to state, so check with your accountant. There are apps you can use that would make this easier, but I prefer to keep a mileage log in my car. Anytime I am going to a bank, client meeting, airport, etc. for business I write down the date, starting mileage, ending mileage, and where too. So many people forgot to account for mileage or they do not keep proper records and can open themselves up to improper filings for audits. In case of an audit, I know my t’s are crossed and i’s are dotted.

This should be another point, but it is also just a given. I will wrap this up by stating the importance of organization. Keep all of your contracts, software organized (and BACKUP UP!), and also keep all receipts, bank statements, etc. organized so it can be easily referenced if needed. Without the accounting being done properly and on time you have no idea on your profits and losses, ROI, and to make sure you are moving your company in the right direction! If you are just now on the brink of starting a new business or even thinking about this, you are at the perfect spot! If this was your year to start investing in equipment, classes, etc. then keeping those receipts and numbers is really important for you! It typically takes a normal small business 3-5 years to turn a profit. All of these expenses can be shown as losses for your new business and a loss can mean a tax return!

Happy Organizing and Number Crunching! If you did not do so hot with it for 2014, hire an accountant to get you in order and make 2015 the year that you stay on top of your numbers so when January 2016 comes, you have everything ready to go and you can make decisions throughout 2015 that can guide your company to success!