The following answers are provided by the Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
A. Keep Great Records
Make sure to keep records of anything that could have a tax impact. It takes a few extra minutes each day to save emailed documents or scanned paper documents, but having that information readily available for your bookkeeper and tax accountant will save a lot of time and money come tax time.
- Brooks Kincaid, Imprint Energy
A. Separate Your Business and Personal Finances
To simplify tax season, separate your personal finances from your business finances. So many startups mix up the two and find themselves in a mess. You must have separate accounts, keep costs separate and maintain separate income statements and balance sheets. When you blur the lines, you create major hassles, which can lead to serious expenses, legal issues and additional taxes.
- David Ehrenberg, Early Growth Financial Services
A. Use CamScanner
A. Hire a Dedicated Bookkeeper
Whether outsourced or in-house, make sure someone is 100 percent on top of the books at all times. I make sure to maintain our company books on a daily basis, and when tax time comes around, I spend no more than 15 to 20 minutes getting everything ready to send to the accountant.
- Laura Land, Accessory Export, LLC
A. Get Shoeboxed
Shoeboxed is a tool I can't live without in my business. All my receipts get mailed or emailed to it, and it scans and sorts them for me. I can see all my receipts organized within its interface, and then my accountant can export the expenses to QuickBooks. It's an affordable service that has saved us so much time and money.
- Natalie MacNeil, She Takes on the World
A. Start With the End in Mind
Know exactly what you need to walk into your CPA's office with at the end of the year, and start the year building a system of organizing such things daily or weekly. Enter transactions, and organize the paper trail little by little, so at the end of the year, you can walk in with everything ready. The few extra minutes every day will save hours and days as tax time approaches.
- Matt Shoup, MattShoup.com
A. Stay Organized
File your receipts as they arrive according to the particular deduction they pertain to in an organized filing system or via a document storage service for electronic invoices.
- Andrew Schrage, Money Crashers Personal Finance
A. Keep Receipts on the Cloud
Staying organized all year might sound cliché, but it's a mantra because it's true. Be sure to keep receipts organized. In particular, create a set of file storage on the cloud, so you can keep your accountant updated throughout the year. Set a date each month to take care of this type of work so that staying organized and keeping your paperwork accessible won't be a cumbersome process.
- Doreen Bloch, Poshly Inc.
A. Ask Your Tax Professional for a Planning Session
If you can sit down with your accountant or tax preparer (perhaps after this year's tax season ends), you can discuss how to improve your tax situation in the coming year. You can also discuss what strategies they would recommend for making tax preparations easier next spring.
- Thursday Bram, Hyper Modern Consulting
A. Don't Do Everything Yourself
Focus on the areas where you can be the expert, and hire others to help you in the other areas (e.g., taxes, accounting, legal work, etc.). I tried to do my own taxes in the early days of my business to save money, and it ended up costing me more time and money to fix everything in the end.
- Allie Siarto, Fare Oak
A. Make It a Game
From Easter egg hunts to Halloween as kids, we are triggered to discover and collect things. I make a game of collecting all of my bank statements and paperwork for tax season. When I collect all of the "pieces" and the basket is "full," I reward myself with something fun like a nice bottle of wine or a massage. Nothing helps me stay more organized or more aggressive in collecting my paperwork.
- Kim Kaupe, ZinePak