Last Friday at 10:49 PM I sent all of my tax information to my accountant so he could do my taxes.  As a solo entrepreneur that works with a team of contractors and interns, I handle the tracking of expenses all year.  Don’t tell any one, but I typically save all of my receipts in a file box and then enter them all at once.  I know, horrible right?!  Every year I VOW that I’m going to track as I go, and every year I end up spending about 10 hours to recreate my expense log before I can even send my files over the fence to my accountant.

Shame on me.

As a creative, it’s easy to say, “Finances aren’t my strong suit.” It’s easy to fess up and get professional help, but the fact of the matter is, we still have to make sure we are running our books so that they don’t run us.

This is my 14th year filing out tax forms for me AND a business (I started my first business at the age of 19, my first year in college).  Now that my files are turned in and I can sleep a little better at night, I’ve thought of four tips I can pass along for a smoother tax time (that will also help you avoid an IRS audit).

1. Get a professional.  Don’t do your taxes yourself.  PERIOD.   I hired a professional five years ago to take over my taxes and I should have done it from the beginning.  The amount of additional money I got back my first year more than paid for the fee (and because I had a business the cost was tax deductible).  My accountant is worth his weight in gold.  He found me exemptions I didn’t even know about, and he helped me understand some of the BIG mistakes and IRS red flags I had in my books.  Unless you want to read all 74,000 pages of the IRS tax code, I suggest you let a trained professional help you AND go to bat for you!  My accounting firm will back me if I get an audit from the IRS and work with me to get it resolved (may it NEVER be necessary). (Here’s a little factoid, when the IRS began in 1913, the tax code was 400 pages).

2. I’m preaching to myself here, but keep track as you go and find a system that makes it easy for you to manage.  I asked on twitter on March 14th “What is your favorite software or app for your business?”  Almost all of the answers came back with financial software and apps.  Interesting! Freshbooks was one of the top open-ended responses.  A system that I had never heard of until that day.  Since January 1st, I’ve downloaded QuickBooks to my phone, but it still has “new” across the top because I haven’t opened it.  Last week, I downloaded Capture N Go, a picture taking software that makes capturing the date, amount and location of your expenses easy.  So far, me likey.   Remember that though I’m a HUGE fan of outsourcing the right things to the right people, this is one of those things that I think needs to stay close to home.  Sure, let someone else crunch the numbers and fill out the forms correctly, but don’t let someone inexperienced work on your finances just because it’s “cheaper”.  I turned a stack of receipts over to my assistant, gave her some training and had her enter them into the computer for me.  I ended up having to redo half of the work because she had classified things in the wrong categories and transposed numbers.   Lesson learned.

3. Be honest.  This really should be number one, because I feel so strongly about it.  I hear a lot of entrepreneurs say, “The government won’t notice if I inflate this number.” or “I deserve a bigger tax break, I’m a small business owner.” and then get “creative” in the numbers.  I’m grateful for a country where small business ownership is an option for me.  By going into business, I agree to abide by the laws of the land when I put an “OPEN” sign above my door.  Not to mention the fact that whether you believe in karma or not, I think it’s bad “business” for us to decide what running a business is worth on the back end.  If you don’t like a law, work with your law makers to get it changed instead of being dishonest in your tax accounting.  Do you want someone deciding behind your back what your service is worth, and leaving that amount at your register without you knowing?

4. Don’t rely fully on digital options. Keep a notebook in your purse, bag or car.  As digital as this age is, cell phone batteries die, and programs don’t open because we forgot our password or for any number of other reasons.   A surprising about of my mileage this year was in my physical pen to paper calendar because digital apps and tools weren’t working at the time.  Don’t leave money on the table.  Track everything, report everything and let your accountant tell you what you can and can’t deduct.

Finally, I’d love for you to share the systems and tools you use to keep up on finances all year long.  What software, apps or programs do you use?  What do you outsource and what do you do yourself?

Michelle McCullough is the Managing Director for Startup Princess and is also a national speaker and business consultant.  Michelle recently released Marketing Mastery, a 4 disc audio program that helps entrepreneurs and small business become confident in their messages that reach the masses.  Michelle became a partner in Startup Princess  in 2008.  She is responsible for event planning, marketing, affiliates, sponsorships and partnerships. Over the past 4 years she has coached women entrepreneurs (and even some men) and helped them grow their businesses from “dream in development” to established thriving businesses.  Michelle is a speaker, strategist, success expert and a serial entrepreneur. She started Doodads Promotional Products when she was 19 and has also spent the last 12 years working in marketing and advertising. She’s worked in all aspects of the industry from production to creative and sales to management. On top of her full-time jobs, Michelle has cultivated her love for entrepreneurship by running Doodads as a successful side business.  Today it continues to thrive.  This year Michelle launched a coaching program called “The Life Balance Myth” to help busy entrepreneurs build thriving businesses AND meaningful personal lives.  She believes that life balance is a myth, but she provides practical tools to achieve personal and professional success.   Michelle has two children ages 5 and 3 and lives in Utah.  You can learn more about Michelle at SpeakMichelle.com.  Michelle’s new radio show “Make it Happen” is ready for your listening pleasure!

I am blogging on behalf of Visa Business and received compensation for my time from Visa for sharing my views in this post, but the views expressed here are solely mine, not Visa’s. Information and opinions are presented solely for informational purposes, and are not intended, nor should they be construed, as a substitute for legal, accounting or tax advice.  You should consult an attorney or tax advisor for individual advice regarding your own situation. Visit http://facebook.com/visasmallbiz to take a look at the reinvented Facebook Page: Well Sourced by Visa Business. The Page serves as a space where small business owners can access educational resources, read success stories from other business owners, engage with peers, and find tips to help businesses run more efficiently. Every month, the Page will introduce a new theme that will focus on a topic important to a small business owner’s success. For additional tips and advice, and information about Visa’s small business solutions, follow @VisaSmallBiz and visit http://visa.com/business.