Regardless of what sort of business you run, paperwork, receipts and tax records are bound to pile up. Combining these with your own personal financial paperwork can be an administrative nightmare if it gets out of control. Then, when tax time rolls around or you're looking to apply for a mortgage, finding the right paperwork can be overwhelming. in this article from Moneysense, Gail Vaz-Oxlade shares some helpful hints for the self-employed individuals.
- Keep all receipts for business expenses in one place. Filing them as soon as they are received will cut down on lost receipts.
- Consider keeping a notebook in the car to record information on business trips, including dates, purpose and total kilometres.
- Keep personal and business banking separate, eliminating any question regarding which expenses are which, come tax time.
I’ve been self-employed for most of my life. Being in charge of everything from payroll to filing, never mind actually doing the work, means I’ve learned to be very organized. I sometimes scratch my head at the chaos surrounding some self-employed people.
Whether you run an auto shop, clean houses for a living or have your own accounting business, if you think a shoe-box is a filing system you’re probably spending hours spinning your wheels while you hunt down that note you wrote yourself on the back of…what was that
People throw away hundreds of dollars every year by losing receipts and forgetting to record potential tax deductions. Never mind the time wasted sorting through messy desks and drawers jammed with paperwork in no particular order.
Collect receipts for business expenses in a basket or file folder as soon as you get them. Keep a notebook in your car for recording business trips: date, purpose, kilometres driven so the tax man doesn’t end up disallowing vehicle deductions because you didn’t keep detailed logs.
Since filing is tedious work, most people ignore it until they’re overwhelmed. File away all completed paperwork as soon as the work is completed. You’ll feel better when your desk and office are clear of all unnecessary papers and you’ll feel less stress because it isn’t constantly on your to-do list.
Are you one of those folks who feels you have to hang on to everything? Do you know you’re making more work for yourself? Get rid of expired insurance policies, unneeded receipts and outdated paperwork. Shred documents with personal information such as policy numbers, contact information, credit card numbers, or other details that could be security risks.
Create email templates for messages you send out more than once. Whether you have to answer frequent questions, remind a client that an invoice is due, or tell a member her credit card payment didn’t go through, having a template will save you gobs of time. The more organized you are, the more efficiently you can run your business.
Above all else, keep your personal and business banking separate. When you run your business out of a dedicated account there’s never any question about what your expenses are for. When the tax man sees personal stuff in your business account, he’ll question everything. The same holds true for credit cards. Keep a card dedicated to business separate from your personal spending. If you have more than one small business, use colour-coded cheques to identify your separate accounts.