Your bookkeeper needs loan statements that break principal and interest into separate line items. Without them, you'll miss tax deductions on interest paid and end up paying more in taxes. It's a small document that saves real money.
When I'm onboarding a new client, I like to explain why we need the information that we're asking for. When you have the intent behind what we're asking you, it helps you understand your financial picture as a whole. When it comes to loan statements, it would seem that you would just need the total amount of the loan or the total payoff amount. But it's really important that your bookkeeper has access to your regular monthly statements that split out your payment between the principal and the interest. It's important that your bookkeeper has the principal and the interest so they can break out your loan payments into those two different categories. That's because as a business owner, you're able to take a tax deduction on any interest paid. So by not breaking out your loans on a regular basis, or at least at the year end, you're missing out on some really great tax deductions, and you're going to lose more of your money in taxes every year. It's a small step that will save you a lot of money in the long run.
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