It’s day thirty-seven of the 40 Bags in 40 Days decluttering challenge. I haven’t forgotten about all of you. You may know that one of the services that Livable Solutions provides is bookkeeping. I work for many regular clients helping them manage paperwork, bill paying and helping prep their paperwork for the dreaded tax season. Thus, I have been a little busy this week with my last minute filers.
That’s why today I wanted to talk about procrastination. Preparing for taxes are a great example of how procrastination can cost you in time and money. If you don’t have a strong system in place throughout the year, it makes this time of year extremely difficult. Don’t repeat the cycle every year.
Create an efficient filing system
Have a good system for collecting and filing your paperwork. If your system is piles, drawers and boxes, you will spend an incredible amount of time sorting through paperwork to get information to your accountant.
Use bookkeeping software to track expenses
Use software like Quicken or Quickbooks (if you are a business) to track your expenses throughout the year. Not only will you have a good sense of your budget, but you can easily run expense reports at the end of the year to summarize information from all of your accounts. If you are not a detail oriented person or comfortable with computers, hire a bookkeeper to track the information for you. While it is a financial investment you are trading it for your time. What is your time worth? You may spend weeks doing what you could have paid someone 2-4 hours a month throughout the year.
Sort your paper early
If you aren’t doing a great job of dealing with paperwork throughout the year, start sorting it in November. Download year end credit card reports as soon as they are available in January. I see many people starting to deal with tax paperwork in April and panicking at the amount of work they have to do in a short time to meet the April 15 deadline. If your paperwork is not prepared and organized you could accrue more fees from your accounting firm doing the leg work to organize it for you.
Make a reusable tax prep checklist
Make a checklist of everything you needed this year so you can reuse it next year. It is much easier to see what you are missing before you hand it over to your accountant. You will avoid a lot of last minute questions and scrambling for that one document you missed. Remember your accountant could be handling hundreds of returns. Your procrastination may cost you when you turn in your paperwork too late. Many accountants will put you on extension if they can’t fit you in at the last minute with their work load. If your return is fairly straightforward, you just cost yourself extra money to file the extension.
Don’t let your procrastination be someone else’s emergency
My clients’ procrastination becomes my emergency at this time of year. I often get calls from people I don’t work with regularly starting in January. They need me to come in and catch up their books for the whole year or sort through paperwork. I love to help. Especially when I can create a system for my clients to follow so they are better prepared for the next year before the tax crisis surfaces again. But, like your accountant, if you come to me too late I may be have trouble squeezing you in at the last minute. Luckily, I work hard to be accommodating!
Think about how procrastination on important activities and goals has affected your life. What are you procrastinating today that you can start tomorrow?