The light in my Los Angeles bedroom is soft and dreamy as I sit back in bed, Mac on my lap. It's a very early Saturday morning, less than a week now from "tax day" -- the dreaded April 15 deadline that sends businesses and individuals of all kinds and sizes into the same kind of frenzy. I make a note on my daily to-do list in my notebook to comb through expenses and look over everything for filing as I make an email date with my accountant for later this week. The entire effort will be shuffled in with an already hectic life and even more hectic schedule -- back-to-back meetings, travel and other demands ranging from business to personal clutter to my calendar.
For entrepreneurs and business owners, taxes become even more demanding and complex -- in any given year, that can be earning revenue, paying employees or contractors, selling projects, a range of expenses. It's not just something you can think about one time a year, like most employees. In some cases, it can feel like a second job to running your business.
"Tax liabilities for entrepreneurs and the self-employed are a year-round concern," said friend and fellow entrepreneur Tony Navarro of Tax Plus. "They're not simply for personal tax, but include periodic payments of employee-related and self-employment taxes and mandates -- Social Security and Medicare, Worker's Compensation insurance, etc. Welcome to the rigors of bookkeeping, quarterly estimated income taxes, state sales taxes, business registration, licenses and fees, identification numbers..."
The list goes on and seems both overwhelming and extensive. While larger companies can often rely on myriad accountants and other help to make things easier, a lot of small, growing and startup business owners are on their own -- and accounting fees can be a killer. In the year I sold my first startup, my accounting bill exceeded several thousands, if memory serves me.
"That's like two Jimmy Choo bags," I tell Tony as we chat. Or two months of PR service from a freelancer, two new Mac computers for your office, or a bunch of other things you could be spending on to bring value to your life or business.
That doesn't include all the leg work that small and startup companies often have to do on their own. It can take nearly an entire Sunday just to prepare everything you may need to send on to an accountant -- expenses, revenue, etc.
Fortunately, paying taxes and other liabilities can be easy -- the key is in your planning. And thanks to technology, keeping record of transactions and actions are far more efficient than ever. My bank can zip me PDF files for the entire year versus stowing receipts (though you'll want to do that as well to be sure that you're filing is on track).
A great way to find a good accountant is through referrals -- ask other business owners you know for recommendations. It doesn't always require that you work with someone that's ultra-expensive. Tony has worked with just as many businesses as he has individuals, as well as freelancers and independent contractors. Like any smart business decision, explore and weigh your options. Like anything, more expensive doesn't always mean more or better service.
"Accounting for the income and expenses of every aspect of your enterprise and meeting all related tax liabilities is as important as the product/service you provide," he adds.
"The key is to make sure your business planning includes tax planning. Bookkeeping is the foundation."
As the morning moves on, I earmark my Sunday for a date with my bookkeeping and expenses, right next to a planned mani/pedi and possibly a massage appointment. After all, if paying taxes is a part of your business life, so is taking care of the founder/CEO who is driving the business.