Each year, we need to go through the business papers and create some order so we can give it to our accountant, right? We may have to go through piles and piles of neglected papers and receipts to find those tax-deductible golden copies that will help us. We all gather these receipts each year, but we don’t have to spend a lot of time doing this task. Here are my favorite tips to help be better prepared for the end of year business tax return.
Paper management tips to ease your end of year tax return process
Pull out all the receipts and any other files from last year and store them into a long-term storage box or cabinet.
Pulling out all the papers from last year will give your cabinet more breathing room for the new year, and you can revisit the files to make sure nothing was misplaced.
Gather vendor invoices and ensure that you have them in one folder.
If you have several invoices for each vendor, sort them in order by date and paperclip or staple them together. This helps me have all the invoices for each vendor in one place. I also like to put a sticky note on each stapled packet of invoices to find the name of suppliers quickly if I need it.
For customer paid invoices, gather up all the invoices and group by the client name if needed.
This task helps with any discrepancies with 1099s from your customers. I do the same thing as above.
- Sort the invoices by the client and by date.
- Staple or paper clip each client’s invoices together.
- Add all of it to one folder marked “Invoices Paid – (Year)”
Payroll papers should be swapped out, and a new binder should be created for the new year.
I like to use double pocket tabs just in case if have a different paper to store in the tax agency section. Below are the ones I found on Amazon (affiliate).
Having binders for payroll really helps keep all the tax offices separated and organized. Years ago, my mother, a payroll guru, had me create binders for all her clients. It worked wonderfully, and the customers truly appreciated the organization. I still do this today for my bookkeeping clients as a part of my service. No one wants to lose any papers, and we especially don’t want to lose payroll tax paperwork.
Here’s how I created the bookkeeping binder! You can make it too. How to Create a Well-Organized Small Business Bookkeeping Binder
Note: Payroll companies give you copies of all the returns submitted in your company’s name. If you have a payroll agency, make sure you store all the paperwork divided by month, quarter, and year-end. Use a binder and place these in this order will help if you ever have to go through the paperwork on your own. This will help when your accountant needs a report at tax return time.
Now, it’s time to review the existing filing folders you have for storing the different receipts.
Does the system work? If you have many small receipts, buying a freestanding small accordion folder works nicely to organize all of them. Add labels like supplies, office supplies, utilities, janitorial, etc… to the accordion coupon book. This coupon book will keep all of the receipts organized when and if you need them. Below are some I found on Amazon for your convenience (affiliate).
Now that you took all these papers out and stored them in your long-term storage, you can extract just the tax paperwork needed for your accountant and place them in a portable accordion folder.
I particularly like this one below. It holds everything including the paid invoices. The 13 tabs accordion folder with a cover works best. Below are the ones I found on Amazon (affiliate).
I hope this helps you minimize the amount of time it takes to set up your files when preparing your tax return. Now it’s your turn. What is your favorite tip when organizing your papers for tax time? Please leave a comment below.
If you need help creating these paper management systems to keep your office paperwork organized for your tax return, feel free to check out our administrative services.
Please note these are affiliate links through Amazon, and at no additional cost to you, I will earn affiliate fees if you decide to make a purchase.
Visit some of these posts below for more information.
Checklist for Starting a Business from the IRS website.
Small Business Forms and Publications from the IRS website.
I do think it is extremely important to be organized. Have any forms, logs, receipts, etc. in folders as this will make it so much easier when tax time comes. Great tips/info, thanks for sharing!
Janet Barclay says
At the beginning of the year, we set up new files for Expenses, Income, Transfers and Withdrawals, and Statements. Within Expenses and Income are alpha folders (A-C, D-F, etc.) and Statements has subfolders for each account. It’s easy to keep files up to date, less work than sorting by client or vendor, and easy enough to find paperwork when you need to. At the end of the year, everything we need for taxes is all together (and already entered in QuickBooks).
Sabrina Quairoli says
Great system, Janet. I find that each company needs to do what works for them so they don’t feel too overwhelmed at the end of the year. Adjusting the process along the way really does help. =) Thanks for sharing.