Accurate bookkeeping feeds directly into your tax return. Sloppy records usually mean you overpay taxes, while underpaying creates legal problems. Keep consistent, correctly categorized records on a regular schedule.
Why is bookkeeping so important for taxes? Well, when we prepare your tax return, we are putting the numbers from the profit and loss and balance sheet statement that you gave us onto your tax return. So if that information is inaccurate, that means your tax return is inaccurate, and our experience has been usually that inaccuracy or inaccurate financial statements leads to overpaying in taxes. Underpaying certainly has its own risks. You don't want that, But keeping money in your pocket instead of unnecessarily giving away is also an important goal. So make sure your bookkeeping is accurate because your financial statements are a direct consequence of the transactions that are entered into your books. Be consistent, make sure they're put in the right spots. We recommend scheduling a regular time so that you get in a habit of doing this on an ongoing basis. One of the things that you commit to as an owner is to have accurate bookkeeping, and I know it's not popular, but it is the truth.
