Now is the Time for a Six Month Review
With summer at hand, record keeping is probably the last thing on your mind.
But, July is a good time for a six-month review of your business records.
Maybe you are doing a pretty good job of saving your receipts. But, unless you are paying close attention to all the records you should be saving throughout the year, you may be creating a bigger job for yourself at the end of the year.
Here’s what you can do to review your records now. If you are missing something, now is the time to reconstruct your records.
* Have you recorded all payments from parents, subsidy program, Food Program, grants, etc.?
If not, identify and record income you haven’t previously recorded.
* Do you have accurate daily attendance records?
If not, reconstruct the days and hours children were in your care and start tracking this going forward. Attendance records can help show how many hours you worked and how many meals and snacks you served. Both of which will help you reduce your taxes.
* Have you recorded all the hours you used your home for business purposes when day care children were not present?
If not, pick two months between now and the end of the year to carefully track these hours using the KidKare software or some other method. Use the average from these two months to estimate an annual total. The more hours you work, the higher your business deductions.
* Have you kept records of all the business trips you have taken so far this year?
If not, go back and reconstruct these trips using receipts, cancelled checks, credit/debit card statements, calendar notations, etc. The standard mileage rate for 2021 is $.56 per mile.
* Have you saved all of your receipts?
If not, look to see if you have other records that show you bought items used for your business. These can include cancelled checks, credit/debit card statements, photographs, written records.
* Do your receipts clearly identify what you bought and how much it cost?
If not, mark the receipt with what is missing (date, name of item, cost, where it was purchased). You may want to start scanning or copying receipts that are fading.
Going forward I recommend that you review your records on a monthly basis to avoid having to sort through a mountain of records at the end of the year.
KidKare
KidKare is a comprehensive software program that can help you keep track of all of these records. You can use the accounting section to record income, issue parent receipts, track attendance, hours and all business expenses. It costs $9.95 a month. For a free 30-day trial, go to www.kidkare.com. Use code 0659 to help support my work helping providers be more successful in their businesses.
Tom Copeland - www.tomcopelandblog.com
Image credit: https://www.flickr.com/photos/130132803@N07/17591348953
