Tax Planning and tips
Tax time is approaching. The dreaded time of receipts, excel spreadsheets and of course writing the cheque to “the man”.
If you are a locum or self employed business you might have a system that works for you to track your expenses, invoices and mileage. How’s it working for you? Are there any changes you could make to lessen tax grief?
If you have been using a shoe box for your receipts up until now, there is a better way. Many apps (free and paid) will allow you to scan your receipt with your smartphone. Shelley Elmblad with The Balance has written a great review of receipt tracker apps to help you determine if one is right for you. One app is even called “Shoeboxed” which I think is a pretty clever name, but maybe I’m easily impressed.
Mileage tracking is a pain for me – I have a little book straight out of the stone age that I can barely read then have to add it all up with an old school calculator. I want to get into the habit of an easier mileage tracking app. I have tried some in the past, but often forgetting to press “start” when my trip started, and I also had a problem with battery life. Some cars have a dual odometer which you could use to track personal (odometer 1) and work (odometer 2), but you would still need to write down each trip destination and reason.
If you are considering going high tech to track your miles, Top Ten Reviews has written an article that reviews the best mileage and expense tracker apps.
Finally, invoicing records are crucial. I used to use an Excel Workbook – one per year, with a tab for each locum invoice. I had a cover page that updated my totals for income and GST automatically. Since January of 2017 I have transitioned to Wave Accounting. This free accounting service has simple templates, easy to manage invoicing and tracking if an invoice is paid, also offering receipts to your customers. You only pay with Wave on their free plan if your customer pays with a credit card, in which case standard credit card fees apply. Just ask your clinic to send you a cheque if you don’t want to pay the fees. I’m happy to pay fees if it means I get paid faster and paid invoices are tracked easily.
Freshbooks is another popular invoicing program (paid), and I have heard good things about Xero. Top Ten has again reviewed popular invoicing apps for your small business.
Nevertheless, with two businesses as well as my locum business I have made the decision to hire a bookkeeper. For a full time locum practice you could hire a full time bookkeeper for your business for less than a few hundred dollars a month. If you are not an organized person, or OCD about keeping your invoices and expenses straight, this could be a good investment. If you want to do some of your books, a service like Quickbooks online might dramatically decrease the bookkeeper’s time every month and make it a surprisingly affordable option. Getting help can seem expensive, but I would never go back to the old shoebox and stress over which deductions are legal (or arguing over it with my husband
Any other tips to manage your books? I would love to hear them in the comments.