4 Bookkeeping Steps To Take Before You Prepare Your Taxes

Bookkeeping is a systematic accounting and organization of financial operations at an enterprise or company. Many companies have to do the bookkeeping every month in order to present it to the tax office. This includes account assignment and balancing of receipts and expenditures.

This also includes the advance return for sales tax, invoicing and dunning; usually, the larger companies have accountants who do this for them. Freelancers or small businesses sometimes also ask a tax consultant. But at least part of the work is usually done by the company itself.

The preparation is relatively simple: the documents are arranged chronologically so that the tax adviser can be given a “work package” in this way. It also includes the cash report without account assignment and the account statement if bank accounts are available. These are administered alone.

Also, calculations, reminders, and inventories are provided by the enterprise on its own first. Here you will find the steps on how exactly to prepare your bookkeeping papers before meeting your accountant.

1. Pre-sorting receipts

Even the smallest company always has at least one account statement. There is also a receipt for each payment transaction that appears on the bank statement. These are, for example, written invoices, invoices from suppliers and wage payments. The first step to save the tax consultant is to sort the receipts directly behind the appropriate account statement.

The individual sheets of the account statements are filed and the documents behind them are sorted. There are hardly any tax consultants who do not want at least this work to be done by the company itself.

2. Entering Amounts Alone

Accountants, whether tax consultants or their assistants, record all invoice contributions and cost types with the help of software. If the amount is correctly assigned to the appropriate number, the software automatically calculates the correct tax rates. The result is, among other things, advance sales tax returns, which are generated automatically.

Basically, you can also make the postings yourself. That is not so difficult since the resulting costs repeat themselves frequently. This includes, for example, telephone charges, rent, and salaries. There are various accounting software that offer templates for such bookings; these can then simply be used again and again.

Also for invoices, with which enterprises obtain their profits, there is an automatism, which generates in the course of the invoice pressure the open items automatically with the bookkeeping. So if you have a small amount of time and concentration left over, you can do some part of the bookkeeping yourself.

3. Discuss the preparations with the tax adviser

Various activities belong to the accounting preparation process. For example, sorting and filing receipts, checking account movements, writing invoices, dunning, and keeping cash books as well as incoming and outgoing invoices. The preparation of travel expense reports is also part of the preparatory accounting process.

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Individual receipts are sorted according to whether the annual balance sheet is necessary for the company or whether a revenue surplus is to be created by the invoice. The aim of the preparation process is to provide the tax consultant with receipts and documents that have already been processed, sorted and audited.

All tasks, which the tax consultant sees as bookkeeping preparation, must and can be discussed detailed individually. So it is no problem to talk openly about whether costs can be saved with a part of self-work.

4. Pass bookkeeping preparation tasks to service providers

If you don’t want to do the bookkeeping preparations yourself, but don’t want to hire a tax consultant for it either, you can delegate both tasks to different service providers. A service provider then takes care of the bookkeeping preparation process, which many companies actually do themselves. One then collects the sorted receipts and sends them to the tax consultant.

The advantage of this solution is obvious because companies can save a lot of work in this way. Under certain circumstances it may also be possible to save money because no additional manpower has to be hired; the disadvantage of this is that of course there are costs that could actually be saved.

How much do service providers cost?

A not insignificant question is how high the costs of preparation tasks are. An answer to this question is not possible. As with any other service, it, therefore, makes sense to compare costs with each other – but here, too, this does not differ from other services, one should not only pay attention to the price. The quality of the work should be good, the tax consultant must also be able to work with the documents afterwards.

What doesn’t belong to the preparation routine?

The postings themselves, the account assignments, payroll matters, balance sheets, financial statements, and similar things are then no longer part of the preparation process. These are taken over by the accountant or the tax office.

If you have any questions regarding this topic, please contact our tax advisors in Barcelona by email or phone.

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