Somehow it is already March, the month that, according to the saying, comes in like a lion and out like a lamb. March is also the month where tax season gets into full swing. Electronic tax filing opened a couple of weeks ago, Tax documents should have been distributed and tax preparers all over Canada are bracing for the volume of work they will have over the next two months.
As a bookkeeper, people will often make comments about how busy I must be because it is tax season, but for bookkeepers, that’s not necessarily true. There are some bookkeepers who do tax preparation work, but not all do.
Never say never, but I don’t do tax preparation work at this point in my business journey. I focus on monthly bookkeeping services for small-to-medium sized businesses. If a business is incorporated, then they will file corporation tax returns, and their filing dates are dependent on the end of their fiscal year which is not necessarily the same as a calendar year. This eliminates a slew of businesses from the spring madness of tax season.
If a small business is a sole proprietor or partnership, they will be required to report their business income as part of their personal tax return, so these make up a large proportion of business owners that will be looking to get their taxes filed during the main tax season.
Even though I don’t do tax preparation work, I like to think that I have two ways of helping business owners navigate tax season.
“Their intention was never to leave it to the last minute……”
1. Taming the lion
This step should only need to be taken once. Most business owners start a business because they want to do something they like to do, and to give themselves more freedom than they can get in a regular day job. Unfortunately, for many entrepreneurs, the administrative side of running a business is as much fun as getting lost on safari, causing them to procrastinate until they absolutely have to get it done….which, in many cases, is tax season.
These are the people who will bring in a shoebox (or a bag, a cookie tin, or one time, a briefcase) full of documentation. Don’t get me wrong, there are some people for whom this is the way they like to do their taxes. They store everything up for a year, then hand it over to a bookkeeper to process everything for them. But for many, having to hand over a shoebox is a “never again” moment. Their intention was never to leave it to the last minute, but they had a business to run, a family to care for and a life to live. There was just never enough time, especially as the number of receipts, both physical and electronic, grew. It was overwhelming. A bookkeeper can eliminate the overwhelm. We have systems in place that can take all that information and deliver it back in a format that is presentable to your tax preparer.
2. From a lion to a lamb
For those having a “never again” moment, a bookkeeper can help restore order and calm to the entire process. Consistency is key, and we have knowledge of the tools available that can simplify the process and help you stay on track. We can review your requirements and help you decide which option is best for you based on the type and volume of transactions in your business, how much time you are able to dedicate to regular bookkeeping, and your budget.
There are many benefits to being consistent with your processes, but one of them is most definitely the reduction of stress at tax time – whether your tax time is now, or a few months from now. Imagine this. It is the end of the year, and you have been consistent with your bookkeeping for the whole 12 months. Everything is up to date and your books are ready to hand over to your tax preparer with no additional work. If you are expecting a refund, you can get it sooner, and if you have to pay, you have some extra time to get the money together (although you should have been putting money aside regularly, but that’s a story for another blog post). And it gives you back time so you can enjoy spring as much as those lambs frolicking in the fields do. This is my goal for all my clients and is one more reason why tax season is not necessarily the busiest time for me.
March comes in like a lion, but tax season doesn’t have to. If it feels like a lion is staring you down, filling you with dread, talk to a trusted bookkeeper who can help silence the lion’s roar. I can’t promise that tax season will ever make you as happy as a lamb in springtime. But I can promise that with the right systems in place, you will have more time to enjoy spring each year.
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