5 Essential Bookkeeping Tasks for a Stress-Free Tax Season

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As someone who’s been through the ups and downs of running a business, I know that staying on top of your finances isn’t the most glamorous part. But, it shouldn’t be something that you ignore and let pile up on you! The best way to have a STRESSFUL tax season is to be scrambling at the last minute, trying to piece everything together.

By setting aside just a little bit of time each week, you can ensure that you’re staying on top of your finances so that next tax season will be a breeze! But, what should you ACTUALLY be doing at that time? I’m so glad you asked!

Keep reading to learn EXACTLY what (and when) you should be doing certain bookkeeping tasks to stay on top of it all! So, grab your favorite cup of coffee (or tea), and let’s dive into the 5 essential bookkeeping tasks you should be doing to prepare for next tax season NOW!

Bookkeeping Task #1: Organize and Save All of Your Receipts

Trust me, darling, keeping track of those little pieces of paper and PDF receipts will save you from headaches down the road.

And I’m not talking about just shoving them all in a shoebox or a filing cabinet…

Set up a system that works for you—whether it’s a physical folder system, a Google Drive folder, or a software —and make sure to save those receipts like the treasures they are!

(Side note: My favorite software is Hubdoc, but Quickbooks Online also has a native receipt management feature you can use with the app or online versions)

Add some time to your calendar at the start of each week to make sure all those receipts are safely saved & organized so you know EXACTLY where to look if you ever need to find it in the future.

Bookkeeping Task #2: Categorize All of Your Transactions

Take the time to classify your expenses and record all your sales income accurately, so you can easily see where your hard-earned money is going and where it’s coming from. 

This is the meat & potatoes of bookkeeping, and oftentimes, this is the one thing that people think of when they think of bookkeeping. But, this is just the data entry piece of it. One single piece of the puzzle you should be doing.

Quickbooks has some amazing time-saving features that make this step really quick (You can learn more by reading this post)

Stay on top of this each week as well. If you use a software for receipt management, these first 2 tasks can be done simultaneously! 

Bookkeeping Task #3: Reconcile All of Your Bank, Credit Card, and Payment Processor Accounts

Reconciling your accounts ensures that your records match up with your bank, credit card, and payment processor statements (paypal, stripe, square, etc…). It’s similar to balancing your checkbook (does anyone still do that anymore?!).

It might not be glamorous, but it’s essential to make sure that your records are accurate, and that you’re reporting your income & expenses accurately.

This task should be done monthly, any time a new statement is available for one of your bank, credit card, or payment processor accounts.

Ideally, they will be available at the end of each month, but sometimes they’re generated mid-month (this is one of my biggest pet peeves when it comes to bookkeeping!) 

Bookkeeping Task #4: Review Your Financial Reports

These are the reports that you will be able to provide your tax preparer at the end of the year to give them about 95% of what they need for your business taxes. 

So, take some time each month to review your financial reports with a discerning eye, and look for possible mistakes. This includes your:

Balance sheet: To see a financial snapshot of your business as of a certain date (typically month end). You can learn more about the balance sheet here.

Income statement: To see how your business performed over a certain period of time (typically a month at a time). You can learn more about the Income Statement here.

Plus, knowledge is power, ladies! You SHOULD be looking at your financial statements for reasons other than needing them for taxes.

Look for patterns, spot opportunities, and identify areas for improvement. I love to use the “compare period” feature in Quickbooks to easily help me compare last month’s numbers to prior months to see the numbers side by side.

You can also do this to compare quarter to quarter, and year to year to get a bird’s eye view of how your business is (hopefully) improving over time! 

Bookkeeping Task #5: Set & Measure Progress on Your Goals

Ah, the sweet sound of dreaming big! 

Okay, I’ll be honest, this task really doesn’t have anything to do with preparing for taxes. But, setting financial (and non-financial) goals gives you something exciting to strive for, and hopefully gets you EXCITED to look at your numbers.

Think about where you want your business to be in the next quarter, year, or even five years.

Break those goals down into actionable steps and watch as your vision transforms into reality. 

Figure out what type of money you may have to spend to implement those steps, and start saving/budgeting for those expenses now.

I love to review my goals every quarter and measure my progress towards my current goals every month, but you can schedule these meetings with yourself (and your team, if you have one!) on whatever schedule helps keep you motivated toward your dreams!

In Summary:

Remember, my retail friends, these bookkeeping tasks are essential. Set aside some time each “Money Monday”, and treat yourself to a Starbucks if it will help you get it done. I promise it doesn’t have to be something you dread & ignore. 

If you need a little extra guidance and hand-holding to learn EXACTLY how all this plays out in real life, then I’d love to have you join my Shopify Bookkeeping Made Simple bookkeeping course to help retailers like YOU learn how to master your own bookkeeping. You can learn more about it by watching my free masterclass.

Here’s to finding your own version of freedom,

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