Now that the April tax deadline has come and gone, this is the perfect time for business owners to use the insight they gained during filing season to their advantage. Nothing gives you a bigger financial leg up than proactive planning. Many of our team members weighed in on the prompt just below. Keep reading to take away valuable insight and helpful tips:

Now that filing season is in the rearview mirror, what are some things business owners should focus on now to kick-off proactive tax planning and financial success for next season?

 

To be successful and proactive in tax planning, business owners should review and analyze financials on a regular basis.  This allows owners to understand if the business is operating as expected or if there are opportunities for improvement. This may include working with their bookkeeper or accountant, and scheduling regular meeting to review financials, as well as meeting with their tax accountant to review any tax planning strategies, to prevent any surprises in tax liability at the end of the year.

-Natalie Bruns

 

Most accountants will offer business owners tips after reviewing their financials. Taking your accountant’s suggestions to heart and implementing them is a great way to get a head start on the next year.

–Emily Zuver

 

Now is the time to consider switching accounting software or even outsourcing your accounting work to an accounting firm. This can be a long, extensive project so the earlier in the year, the better. Also, to avoid surprising tax bills, make sure to reach out to your CPA after Q3 to ensure enough year-end planning opportunities. If you are a single member LLC, explore the various retirement options for maximum deductions and maximum ability to put away for retirement.

-Zac Anderson

 

Cash flow management is one of the biggest areas that can impact the success of a business. Use accounting software to keep your financial statements up to date and to be able to monitor your expenses, accounts payable and accounts receivable in real time.

–Carmen George

 

Here are some things business owners should focus on now to kick-off proactive tax planning and financial success for next season: 1.) Have a well-organized document storage solution to collect and organize receipts, invoices, bank statements, etc. Using cloud-based accounting software such as QuickBooks Online can help with this. 2.) Maintain regular communication with your accountant throughout the year. We can provide ongoing guidance regarding major purchases, tax saving opportunities and estimated tax payments. It also helps us to proactively address any tax-related concerns you may have and avoid surprises at tax filing time.

-Danielle Cottle

 

Income & Expense allocation: Set up your books to reflect the breakdown of income and expense that you desire to track. For example, you may track these per type of activity, type of items sold, customer category, department, or location. This will help you identify areas that are more (or less) productive.

Once you’ve set this level of tracking in place, develop methods to check that all employees involved are correctly implementing the process.

Consistency of Reporting: Your records are easier to understand, compare and review when you use consistency in the formats, names of accounts, and even the font choices.

Also, be aware of account name duplications, such as ELECTRICITY, Electricity and Utilities > Electricity. This example may cause improper reporting for electricity and would make year-to-year comparisons less clear.

-Judy Bickel

 

Post- tax season is an ideal time for business owners to really take a look at their AR. Keeping AR in check is crucial. Cash flow is everything and after owing taxes, this is a good time to be focused on what is coming into the business.

-Lisa Decot

 

Taxes are at the forefront all year for business owners. Therefore, quarterly, or semi-annual meetings with their accountant are a good idea to see where revenue and net income are to see if there needs to be changes made to their estimated taxes. This keeps them from being blindsided in the event they must pay a lot more than planned initially.

-Ashley Makley

 

For businesses making asset purchases for the purposes of accelerated depreciation, make sure and purchase the asset ahead of time to ensure it is placed in service by the entities tax year end.

-Mark Malachin

 

At Holbrook & Manter, we strongly believe in proactive tax planning and frequent communication with your accounting team. If you are looking for a new accounting relationship, reach out to us today. We would be honored to help your business grow, thrive, and remain compliant.