How will you prepare your information for preparing your tax returns this year?
Will you trawl through all the paper and electronic files to find the information you need and sort it as you go? Or will you grab everything you can see that might be relevant and drop it into a box and take it to your accountant?
It may be a bit late to get your files organised for the last tax year. But you can make it a lot easier for yourself for next year if you start to sort your tax information now. And if you do have time to deal with last year’s files, then you can follow this advice now – it will just be a bigger job because you have a whole year’s worth of information to work with.
Firstly make a list of all the sorts of information you have and that you need for your end of year accounts. This list will need to include invoices, receipts, bank statements, dividend and interest statements, information about all business income, GST returns, cashbook, assets sold and purchased, motor vehicle log books. If you have an accountant, you will probably get a questionnaire that sets out all the information you need to provide. You can use this to help organise your files so you don;t have a hassle next year.
It doesn’t matter how you store your business information – in electronic form if you run a paperless office or in some sort of paper filing system; you can organise your stuff in the same way.
A large ring binder or two is a good starting point for your paper filing. Use a set of dividers to separate out the different bits of information. You can label these dividers for bank statements, credit card statements, PAYE, GST, invoices out, invoices in, investments, etc etc
For your electronic directory, you can use the same headings for your electronic files.
The important thing is to get your tax files organised so that tax time doesn’t seem such a burden.
Just think how nice it would be if this time next year you could just pick up some organised files, or download your electronic files to a USB stick and hand it to your accountant ready for him or her to do their magic to produce a set of accounts.
And more importantly, just think how much teem you will save by not having to spend so much time finding everything that has been put into a pile somewhere not to mention the smaller bill from your accountant because your tax information was so well organised.
So – its tax time again. Yea!