How to Prepare Financials for Your CPA
Set your CPA (and your business) up for success this tax season.
For small business owners, tax season can either be a breeze—or a nightmare. The difference often comes down to one thing: how well your financials are prepared.
If your CPA has ever told you, “Go find a bookkeeper,” it’s not because they don’t want to help—it’s because their job is to file taxes, not to organize your books. Preparing clean, organized financials can save you time, money, and stress—and make your CPA’s job infinitely easier.
Here’s how to do it the right way.
1. Reconcile Your Accounts
Before handing over any reports to your CPA, make sure your bank and credit card accounts are reconciled. This ensures your balances match your statements and no transactions are missing or duplicated.
Tip: Use QuickBooks Online to reconcile each account monthly. Don’t wait until year-end—it’s much harder to fix 12 months of errors in one sitting.
2. Categorize All Transactions
Every income and expense transaction should be properly categorized. Mislabeling can lead to incorrect reporting and missed deductions. Use consistent categories and avoid the temptation to use “Ask My Accountant” for everything.
If your books are messy, a clean-up service might be necessary before sending anything to your CPA.
3. Run Key Financial Reports
Your CPA needs specific reports to file your taxes accurately. At a minimum, you should provide:
Profit & Loss Statement (P&L)
Balance Sheet
General Ledger (GL)
Run these from QuickBooks for the full tax year and double-check that everything looks correct and consistent.
4. Track Owner’s Pay & Draws
One of the most overlooked areas in small business bookkeeping is how owners pay themselves. Make sure any transfers, draws, or reimbursements are clearly documented and not mixed with business expenses.
5. Keep Your Receipts
If your CPA—or the IRS—asks for documentation, having digital copies of your receipts can be a lifesaver. Store them by month or expense type using tools like QuickBooks, Hubdoc, or even Google Drive.
FAQ: Preparing Financials for Your CPA
Q: What’s the #1 thing my CPA wants from me?
A: Clean and accurate financial reports (P&L, Balance Sheet, GL), with properly categorized transactions.
Q: What if I made a mistake in my books?
A: Work with a bookkeeper to clean it up before handing it off. Sending messy books to your CPA can result in higher fees or errors.
Q: How early should I start preparing?
A: Ideally, your books should be maintained monthly so you’re always ready—but aim to be CPA-ready by January.
Q: What if I don’t use bookkeeping software?
A: Now’s the time to start. QuickBooks Online is a great option for small businesses and integrates easily with CPAs’ systems.
Let’s Start Doing Business Right
If your CPA says your books need work, we can help. Get your financials tax-ready with help from DBR Bookkeeping.
📅 Book a free call with Dr. Bryan Raya today and avoid last-minute stress.
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