It’s that time of the year again! Not only is it impossible to get through the mountains of snow – but it also happens to be tax season. Not sure which one is worse?
Easy, the snow!
That is, if you get organized now, with the help of your favorite cloud accounting software.
Doing one’s accounting in the cloud is becoming more popular among small business owners today than ever. An estimated 80% of organizations will be using cloud services by the end of 2014, according to IBM.
Why is this?
Cloud backed-up data gives small business owners more security, flexibility, and productivity, and reduces costs. Putting your numbers in the sky gives you a safe and easy way to stay on top of your books, and still have time to build plenty of snowmen this winter! Yipee!
Now that we know cloud accounting is more popular, safer, and beneficial. Let’s get that looming fear of filing taxes out the way. A good place to start, is asking some experts.
Here are some great fiscal year-end tips from cloud accounting software experts who work with hundreds of small business owners just like you:
1. Defer your Income.
“Everyone knows that income is taxed in the year it is received, but why pay tax today if you can pay it tomorrow instead? If you’re self-employed or do freelance or consulting work, you have more opportunities to defer your income which means lower taxes during tax time. For example, sending client invoices from your integrated cloud accounting software until late December can ensure that you won’t receive payments until 2015. This will keep your taxable income low when you file your return on the cash basis of accounting.“
—William Lopez, Advisorfi
2. Take control of tax liabilities.
“The year-end tip I always share with my clients is to check your profit and loss…If your income is higher than you planned, you can squeeze in a few extra purchases before the end of the year so your tax liability is not higher than you planned. (The after Christmas sales are an added bonus if you are looking to replace any office equipment).”
—Melissa Whaley, Whaley Bookkeeping
3. Consult with an Expert.
“Having trouble digesting the numbers that make up all your accounting reports, you may want to consider investing in some reference materials or speaking with an expert with cloud accounting software (and accounting in general). If anything you should be able to get a free consultation and it always helps to get a better understanding of your numbers. Having this visibility to make better financial business decisions, will pay off tenfold. Look for a cloud accounting software that allows for online instant access to your books. This is great for collaboration with your accountant and/or bookkeeper.”
—James Krener, Krener Bookkeeping & Tax
4. Start early (if you can).
“I always tell my clients to save yourself time and more importantly stress, by starting early. Working with a cloud accounting software like helps – big time. December is a great time (before the holiday rush) to work with your tax preparer in making a list based on last year’s documents, and carve out time each week to separate personal and business expenses.”
—David Goldstein, DataPro Services Inc.
5. Make your numbers accessible.
“Make your business story strong with numbers you understand. Use software that is in the cloud, always updated and accessible from all devices. You’ll have a great year in 2015 because you will be organized. You’ll also get exceptional service when you are ready for tax time!”
—Stefanie Krutilek, The Krutilek Group
6. Get organized with software, period.
“Time to chuck the shoebox of receipts. Ensure that all of your transactions from the year are reconciled and categorized, via the help of software. Capture all of your receipts and collect any missing information from independent contractors/employees. If you aren’t using a bookkeeping program, sign up for one now.”
—Danetha Doe, Danetha Doe Consulting
7. Take advantage of deductions.
“If you give your employees a turkey or ham for Thanksgiving or Christmas, you get to deduct the cost and your employees don’t have to pay taxes on the item. However, if you give them a gift certificate for a turkey or ham or anything else, it must be added to their wages with all payroll taxes due. Happy shopping.”
—Jeanne Harris, AST Business Solutions Inc.
You know what they say, better late than never. So get started today! You’ll thank yourself when your birthday rolls around in 2015 and everyone thinks you’re the same age as last year. Less wrinkles, less stress and best of all, less misplaced business documents. That feeling you’ll get from knowing what is financially happening with your business — well that’s just an added bonus!
If you’re looking for an easy way to get your finances organized in 2015, check out a cloud accounting software that is designed for small businesses. Not enterprise. Not small businesses with 500 employees or more. Actual small businesses. But most importantly find a software that offers great customer support, is easy to use, and fits your budget.
Looking for Accounting software? Check out Capterra's list of the best Accounting software solutions.