Our View from

Canal Street

Our View from

Canal Street

Making Small Changes Now Can Make a Big Difference in 2023

by | Mar 17, 2023 | Blog, Bookkeeping Tips

Taxes can be a stressful time for business owners and many questions can arise.

How was the process to get your business taxes completed?
Were you rushed to get your accountant what they needed?
Did you have the required detail organized?

Making some small changes now can make a big difference in making this year better for you and your business. We recommend five changes to better manage your business, reduce your stress, and make next year’s tax season smoother and easier for you and your team.

A theme of these recommendations is the importance of ongoing review and reconciliation. Reconciling select accounts and bank statements will help identify business opportunities as well as issues.

Five Changes to Make 2023 a Better Year for Your Business

1. The Importance of Reconciling Bank Statements

Quality bookkeeping is essential for tax season to go smoothly. Depending on your business and the volume of transactions, reconciling bank statements should be done monthly or quarterly. By reviewing and reconciling bank statements issues are identified quickly, providing the opportunity to resolve matters sooner, which avoids matters becoming a bigger, costlier problem if issues remain unnoticed until tax time.

We understand that you may not have the time, skill, or the desire to reconcile bank statements. That is why we offer outsourced bookkeeping services which can include reconciling your bank statements for you, identifying and resolving uncovered issues, and providing timely and accurate financial statements,

While our skills do not lend us to being a chef running a restaurant or knowing how to plumb a home, we offer bookkeeping services so you can focus on running your business, playing to your core skills and strengths.

Making this change will provide you with insight into how your business is performing, enabling timely decision making and giving you peace of mind. Reconciled bank statements are an important component in a smoother tax preparation process.

2. The Benefits of Using a Payroll Service

Payroll is complex and oversights or errors can have an adverse effect on your business. If you are not using a payroll service to manage your business’ payroll, we recommend you do so. The risks of having an unpaid payroll liability are real. One of our clients was not using a payroll service and we discovered that unemployment withholdings were not properly accounted for. We helped the client resolve the problem and then recommended a payroll service for the client. The client now has reassurance that payroll accounting and associated liabilities are managed and in compliance.

As a client, if you are not currently using a payroll service provider, please contact us and we can refer you to a service provider so the risks of doing payroll yourself are mitigated. The result? Your peace of mind and the benefit of having a company that specializes in payroll doing the work so you can focus on what you do best.

3. Reconciling Sales Tax Liabilities

Reconciling sales tax liabilities is important as well, and likely something most business owners have no interest in doing themselves. Properly accounting for state sales tax liabilities affects most businesses and can be a complicated liability to accurately manage. Periodic review of your income statement and reconciliation of the balance sheet will provide insight into the performance of your business, as well as identify potential sales tax liabilities for your business.

We offer reconciliation of sales tax liabilities as part of our outsourced bookkeeping services and can take this mundane analysis off your plate while giving you comfort that your business is in compliance.

4. Review of Meals Tax Liabilities

Restaurant owners face a unique set of accounting challenges including meals tax tracking and compliance. In 2022, Massachusetts enacted a new law regarding meals tax reporting (read our blog on this change here). Properly accounting for meals tax liabilities is important especially now with the increased risk of a meals tax audit.

Accounting for meals tax liabilities has become more complex and confusing with the increased popularity of meal delivery services. One of our clients discovered they had paid double their meals tax liability as the meal delivery service was also paying the meals tax. Imagine how our client could have benefitted from having these additional funds to run their restaurant?

If you are not certain your restaurant is properly accounting for meals tax, consider having the professionals at LCW CPAs do the review and analysis for you. A meals tax audit can be time consuming and disruptive to running your restaurant. We can help ease your mind while handling the bookkeeping for your restaurant, so you can focus on what you do best.

5. Organizing Tax Related Backup

Making small improvements in organizing statements and tax-related supporting backup can greatly improve the tax preparation process for you and your business. A few suggestions include:

  • Save electronic bank statements in an electronic folder that can then easily be shared with us digitally through our secure client portal.
  • Save receipts in a central filing location including scanning receipts of any fixed asset purchases throughout the year. Some clients take pictures of receipts and store in electronic folders to share with us securely via our client portal.
  • Accurately tracking business-related mileage for tax deductions can be a challenge for many businesses. There are multiple, easy to use apps to assist in tracking business mileage.

You are an expert in running your business. Bookkeeping is one area of our expertise. We can help you make 2023 a better year and the next tax season a smoother one. We are not plumbers, electricians, construction workers, or restaurant owners. While you have skills and capabilities that none of us at LCW CPAs have, we offer our services to help you focus on your strengths and leave the numbers, accounting, and tax work to us.

We are here to help make 2023 a great year for you and your business. Learn more about our outsourced bookkeeping services and contact us to help you make these changes that can have a big impact for you and your business.