Every year at tax time, he needs to transfer all of his records into Quickbooks, instead of doing it throughout the year. Why? I don’t know, maybe he expects January to be slow. Maybe he thinks we will win the lottery and be able to pay someone to do his books this year. Or perhaps it is because it is a boring, tedious, overwhelming job that does not generate revenue like “drilling and filling.”
I get it, I did the same for many, many years, and my business IS notoriously slow in January, so it was okay. Plus, I was really, really organized, so pulling together my records was easy.
How is it for you, this year?
Let me preface this that I am no bookkeeper, nor accountant, nor tax attorney, nor employee of any form of local government. In fact,I know very little about this stuff other than what I can take as a deduction in my own artistic entertainment business.
Where do YOU keep your records? Please don’t tell me about the secret compartments in your purse. Or the special shoebox in your closet. Or, a single manila file folder on your desk. You DO have a desk don’t you? (If not, skip to bottom and go to Walmart to get yourself a tray table you can call your own. Be sure to keep the receipt).
As business owners we are often so busy generating income, i.e. gigs, or building relationships with clients, that the humdrum activity of expense logging and income reporting is left to the last minute.
And here we are, at the last minute…okay…last month. Now you HAVE to keep track, put it in a easy to calculate format, so that you can get back all that you are due from the IRS (or pay, if you must). The next few weeks are a time to organize not only 2016 —but get organized for 2017! What better time to set up a system!
When you think about your own business, do you keep track of ALL your expenses, not just supplies and workshops?
All of these are deductible expenses, including meals, hotels, parking, and tips when traveling to conventions or classes. Do you have accurate receipts that you can organize by date and vendor? Or are you reading this newsletter to pass the time while you avoid pulling all your information together for this year’s tax filing?
If it is the latter, I am honored, but want you to get back to your business needs, so I am sharing with you some of the basics for a small business that you should have in place, if you want to breeze through March and April stress free.
As small business owners there are certain stages that we go through when growing our business.
1) manage- this is about having systems to handle incoming calls, keep track of bookings, detailed contact information on clients and artists, and understanding where our money comes from and where it goes to. Some call it Cash Flow, I think of it as more like a “dam release”…tons of money one minute, and absolutely NONE the next….depending on the season.
2) market- this is about having systems to grow your client list and keep track of who you are in touch with, how often, and expanding that list continually. It also means having systems so you stay TOP of MIND for those that love you most, so that they can refer you to others. Most small business owners do this…but very haphazardly.
3) multiple streams of income- this stage is when you are looking to expand into different types of income-generating activities: consulting, magic, adding balloon decor, having a party venue, etc. This demands segmented strategies, perhaps more automation of incoming client requests, e-commerce on your web site, and perhaps a team of employees.
My guess is that if you are reading this you say you are in stage 2, but you are really in stage 1 and we can determine that by asking the following questions*, honestly. Mark these True or False
NOTE: Unless you can say this is ALWAYS TRUE, you must mark it as false!
Now that you have learned a little more about your own business organization, what do you need help with? Now is the time, when things are slow to get the systems in place so you can work at lightening speeds in the spring. If you are disorganized, it is difficult to appear organized to your clients…and believe me, they do NOT want a disorganized entertainer coming to their event.
If you need help organizing your tax records for the year, I am sharing a free resource, you can get it by clicking here. You can use this spreadsheet to track your expenses this year. Or you can even use it to help record receipts from last year.
Good luck and Happy Filing! Remember, you have a couple of extra days this year…taxes are to be postmarked by midnight, April 18, 2017.
*adapted from material shared by Tracey Lawton Training and Consulting.