While it may be simple to collect your financial statements at the end of the year and file your taxes in a rote manner, there are many potential areas of savings if you analyze your financial statements carefully. Here are some strategies for leveraging your financial statement for lower taxes and expenses for your business.
Carefully Sorting Out Expenses
The first opportunity you have is in carefully sorting out your expenses when you receive your financial statements. You can split them into various accounts, such as business travel, office supplies, client meetings, and other categories of spending. This way, when your accountant does your taxes, they will be sure to include each expense in the appropriate category; you may be able to deduct some of these items or put them in a category that has lower taxes.
Gathering Receipts Carefully
The next thing that you can do with your financial statements is use them to gather all of your receipts. Each time you go to reconcile your statements, be sure that you try and track down any missing receipts. If an auditor needs to see your financial statements, they will also want to see that the expenses were used for the purpose that you claim on your taxes. If you claim $2,000 on client meetings, you will need to produce enough receipts to equal this total. Rather than giving yourself a heart attack in the case that you get audited, take the opportunity to gather your evidence while it's still fresh in your mind. This may mean that you need to dig through your emails to gather receipts for online purchases or contact some of your vendors to get additional copies of their invoices.
Thinking Critically About Potential Deductions
When you have your financial statements in hand, you might want to hire a financial-statement consulting company to make sure that you're not missing any tax deductions. The company will take a look at the categories that you spend the most dollars in and try to fit each expense into a tax-deductible spending category. The amount you spend on a consultant will often be more than compensated by the amount you can save on your taxes. For more information about these consultants, talk with financial consulting companies near you.
Analyzing Your Spending
Finally, you have the opportunity to analyze your spending in order to improve for next year. A financial-statement consulting company might analyze each category of spending to see where you're spending too much or too little, and you can use this information to adjust for better operations next year.Share