Getting Your Books In Order Before Contacting Your CPA

You and your business will come to a point where you will have to move forward with an accountant by your side. Keeping records of day to day transactions and other regular routine accounting duties can be truly taxing (no pun intended, or is it?) to do on your own.

One of the best things that you can do to smoothen the transition and also initiate a good start with regards to communication and building a relationship with your accountant is by getting your books in order before you even start contacting them. Getting all these books organized will be beneficial to not just your accountant, but to yourself as well.

But where do you even begin? Which financial records would they need to see in order for them to start? There’s a daily recording of transactions, a general ledger, your cash records, and depending on your business, perhaps accounts receivable ledgers and accounts payable ledgers. It may seem like a lot, but don’t panic. Let’s make it a little less overwhelming for you, here are the basics that you need to prepare before contacting your CPA:

Identification

Get yourself and your business’ identification information ready. Mostly this will be used for verification purposes. Usually, your accountant would need to verify if you are who you say you are, and of course, if it matches the other documents that have your information on it. Bring any valid id’s too just in case.

Financial Statements

Your accountant would need to see your financial statements for a whole period. You might just have one main account, or you may have a deposit or reserve account which needs to be declared to your accountant. It’s also important to bring along any cheque or paying in books that you use.

They will also need these statements to see if there are any areas of opportunity, such as tax-deductibles.

Financial Statements may include and are not limited to the following:

• Bank Statements

• Loan Statements

• Credit Card Statements

Invoices and Receipts

One of the things to prepare would be your records of invoices and receipts as it is an important source of reference with regards to your tax bill. You would want your accountant to check these statements if you want to get your deductions and credits. You should also include your petty cash payments so that your accountant can track and reconcile them.

Employment Income and Payroll Records

You should take a copy of each month’s payroll so your accountant can reconcile the net payments your employees have received.

Your Income

You should declare any income you have received throughout the year, including any extra from self-employed work, or any sales such as property or shares. Did you accrue any additional income throughout the year? This may include interest and dividend income from investments, unemployment income, or social security income.

If you have any statements with regards to these sources of income, it will be best to organize and prepare them for your accountant as well.