After 7 years of doing this I have a three step process that seems to speed up the tax preparation with our accountant (and therefore reduce fees) :
(1) Keep the bank statements.
(2) Each month create an EXCEL spreadsheet with a line entry for every bank statement transaction.
– simple stuff like date, other party, amount.
– also categorise each expense into the correct expense bucket
(based on previous years reports from accountant).
(3) Get 2 concertina files (boxes with 12 or more compartments)
– in one put all small cash receipts and till invoices – split on a monthly basis.
– in the other put all invoices, bills and bank statements – split by company.
Now you have a pretty good feeling for how your business is going, you can see income and expenses, and also see which expense groups are biggest.
We give all this to our accountant :
– he goes through the bank statement
– finds the excel description
– and can refer to the concertina file if he’s unsure or needs more info.
As I said this system has evolved over a few years, and by directly asking the accountant what he’d like to see us do to make the task easier.
We find it simple to do – and it certainly seems to reduce the time the accountant takes – and thus the fee.
:hattip: