Bookkeeping Requirements for Business Owners

A few years ago, I implemented a new policy for my business clients where I require business owners to use a professional bookkeeper.

This policy was implemented for a few reasons, the biggest being that I am just too busy during tax season to try to decipher clients spreadsheets or fix bookkeeping errors.

If clients are set on doing the books themselves, I ask that they at least have a professional review things quarterly to ensure that transactions are being classified correctly and accounts are being reconciled regularly, that way when it comes time to file taxes, we know that everything is clean and ready to go and we can focus on getting the return prepared and filed in a timely manner.

I also have an option for very small businesses, that might not feel quite ready to take on the extra expense of hiring a bookkeeper. If you are willing to total your own income and expenses and complete a self-employed worksheet with this information, we can prepare your return based on those totals without having an official profit and loss statement from your bookkeeping software. This is only available for single owner LLC's and Sole Proprietorships. If you have a partnership or corporation that requires a separate entity tax return, the balance sheet is really important and I would need you to be working with a professional bookkeeper or accountant to ensure that things are being recorded accurately and reconciled regularly.

I have been relatively lenient about this requirement while I slowly transitioned to these new procedures, but as the October 15th extension deadline approached, and I had multiple clients turning in records and receipts without the use of a professional bookkeeper, I wanted to take this time to reiterate the requirement.

2025 will be the last year that I will be able to grant leeway to those of you who are already clients of mine and have not yet made the commitment to use a professional bookkeeper. I have partnered with a few great local professionals who specialize in accounting and bookkeeping, and I would be happy to introduce you to someone if you’re ready to make the transition.

If you would prefer to keep doing your own books, I am willing to do your tax return for 2025 if you are already an existing client since we’re already most of the way through the year and I haven’t done a great job of communicating this requirement, but starting in 2026 and beyond, if you choose not to use a bookkeeper and are not able to fill out my self-employed worksheet, you will need to make other arrangements for your tax preparation needs.

Using a professional bookkeeper isn’t just great for tax time, there are so many other wonderful benefits that come with working with a professional. Some of them are:

Financial Accuracy

• Bookkeepers ensure that all income, expenses, and transactions are recorded correctly, reducing errors that can cause issues with taxes, payroll, or financial reporting.

• They help reconcile accounts so balances match, avoiding costly mistakes.

Time Savings

• Delegating bookkeeping tasks frees up time for you to focus on growing your business, serving clients, or managing operations.

• You avoid the need to learn complicated accounting software or tax rules yourself.

  
  
  
  

Better Decision-Making

• With accurate, up-to-date financial reports, you can see your cash flow, profit margins, and expenses clearly.

• This makes it easier to set budgets, forecast growth, and make strategic business decisions.

Tax Compliance & Preparation

• Bookkeepers help keep financial records organized for tax season.

• They track deductible expenses, prepare reports for your accountant, and reduce the risk of penalties from incorrect filings.

  
  

Cash Flow Management

• By tracking receivables and payables, a bookkeeper helps ensure you’re getting paid on time and not missing critical payments.

• This supports healthier cash flow and prevents financial strain.

Cost Savings

• Catching errors early and keeping records organized can save money on taxes, late fees, and accountant cleanup work.

• Many bookkeepers identify unnecessary expenses or inefficiencies.

Business Growth Support

• Professional bookkeeping makes it easier to secure loans or attract investors by providing clear financial records.

• It helps demonstrate financial health and credibility to banks and stakeholders.

Peace of Mind

• Knowing that your finances are being handled professionally relieves stress.

• You can be confident that nothing important is slipping through the cracks.

Ready to get started with a professional? I have some great local referral partners that I trust and work well with. If you would like an introduction, we can ensure that your accounting and tax preparation processes integrate seamlessly, relieving much of the stress of tax time, and ensuring that your business runs smoothly behind the scenes throughout the year.

Please reach out if you would like an introduction, or a list of our trusted accounting professionals.

Thanks for your continued trust and support. We look forward to being able to serve your tax preparation needs and, as mentioned above, would love to help connect you with a bookkeeper if you currently do not have one and are a business owner who would like to continue using our services after tax year 2025.