Business scenario: Organizing your tax info

February 21, 2018

Nobody likes tax time. Every year it’s either stressful, expensive, time-consuming, or some combination of all three. But doing a little prep work in advance can help streamline the process and reduce your stress. Being more organized with your financial information might even save you money. After all, you can’t take deduct an expense you haven’t recorded.

No matter what your situation, the best way to organize your tax-time information is to automate it as much as possible. For example, a modern POS system like Clover can automatically sync all your sales records with QuickBooks or another accounting system. Inventory tracking apps can help you keep track of how much you had to start the year and how much you purchased along the way. Whenever possible, choose apps that work together and work with your accounting software, to minimize the potential for mistakes when you manually enter information.

Here are some tips for organizing your tax information to simplify the tax prep process as much as possible:

If you file your own taxes

Filing your own small business taxes may sound daunting, but it’s definitely doable if you have the right tools. You’ll want to gather all the information you might need in advance, so you’re not scrambling to find a receipt while you’re in the middle of some complex math. A checklist like this one will help you get organized, but what you’ll need basically breaks down into three categories: your business income, your inventory costs, and your other expenses (wages, rent, insurance, and so on). That means you’ll need to gather records of all your sales for the year, receipts for inventory purchases, W2s and 1099s for employees and contractors, and records of all other expenses.

If you’ve been stuffing all your receipts in a shoebox up until now, don’t panic—now is a great time to start transitioning to an automated system. For this year, organize your paper files (separate income, expenses, and legal/tax documents) and then scan as many receipts and other documents as you can, so that you have backups of everything. Start automating your accounting now, and next year’s tax season will be that much easier.

If you work with an accountant

Working with a pro can take a lot of the stress and hassle off your plate. But it also makes the shoebox method of accounting a lot more troublesome. When you work with a pro, you need to make sure all your documents and records are accessible and easy for someone who isn’t inside your head to understand.

Chances are, your accountant will have his or her own system—they may give you a checklist of documents to scan or forms to fill out. But one very easy way to work with a pro is to simply give them access to your QuickBooks account, or whatever accounting software and record-keeping you’re using. That way, they have all the information at their fingertips, and they can use more of their time and energy looking for deductions and helping you minimize your tax bill. Again, if you’re disorganized this year, don’t despair—take a weekend to get your documents together for this year’s taxes, and then transition to an automated system for next year. Your accountant will thank you.

If you’re just starting out

If you’re used to filing taxes as an employee, with payroll taxes deducted for you, your first year filing for a new business can be difficult. But if you’re starting a new business, now is the time to start off on the right foot and get organized from day one.

Your best bet is to automate as much as possible. Track everything—your inventory, your expenses like travel, meals, and healthcare, and your business income. Many people find it’s easier to open up a separate account for their small business, so the income and expenses are easier to track. You might also find using a separate credit card for business expenses helps keep you organized.

Start out by automating, and then check in on your system at least once a quarter to make sure there weren’t any expenses or other information left out. When you use the right tools, filing your business taxes can almost be easy. Almost.

Clover is sold by leading U.S. banks including Bank of America, BBVA, Citi, PNC, Sun Trust and Wells Fargo. You’ll also find Clover at our trusted partners including Ignite Payments, Restaurant Depot, and Sam’s Club. For more information, visit us at

[image: Taxes by GotCredit on flickr]