5 Bookkeeping Resolutions To Keep in the New Year

January 29, 2021

No matter the size of your business, the right bookkeeping strategy prevents a wide range of headaches. It ensures you have the documentation necessary for tax season, helps avoid overspending, and provides peace of mind among numerous other benefits. If you’re still making your resolutions for the new year, review what your Encino tax consultants recommend in terms of bookkeeping. 

Resolution #1: Organize, Organize, Organize

Use the new year as a time to organize your business, including everything to do with money coming in and going out. Sort through those folders that look like they’re about to burst, or that filing cabinet that’s been collecting dust. Consider switching entirely to a digital system, but keep hard copies of important documents. 

Resolution #2: Update the Payroll

Forget paying employees with checks, even if they’re independent or subcontractors. Opt for direct deposit, PayPal, or even Venmo depending on what works best for your business. If you use Venmo, ask contractors to list what they’re invoicing for to make tax time easier on yourself. 

Resolution #3: Invest in Quality Software

Make a point of upgrading bookkeeping software this year to manage business finances efficiently. Your Los Angeles accounting service recommends software that offers multiple features, such as one that tracks inventory as well as payroll among other things. The right software can prove invaluable, even if your business is relatively small. 

Resolution #4: Keep Personal Finances Separate

Ensure all personal finances stay separate from business expenses to once again prevent confusion during tax time. Even accidentally deducting personal costs can result in an IRS audit because it looks fraudulent. Dedicate an account solely to business expenses to streamline finances and stay out of the audit zone. 

Resolution #5: Work With a Bookkeeping Service 

Hire a reputable bookkeeping service to help you in 2021, even if it’s just for organizational reasons. Professional bookkeepers put years of experience and knowledge to work for you, and can easily identify what areas of your business need assistance. They’ll also provide tips for future financial management and can help you implement a system that’s ideal for your business needs. 

Work with Wallace and Associates, your L.A. accountant service, to help your bookkeeping efforts this year.