09/17/2026
๐๐๐๐ข๐ฅ๐ ๐ฌ๐ข๐จ ๐๐๐๐ ๐ง๐๐ ๐ง๐๐ซ ๐ฅ๐๐ง๐จ๐ฅ๐ก, ๐ ๐๐๐ ๐ฆ๐จ๐ฅ๐ ๐ง๐๐ ๐๐ข๐ข๐๐ฆ ๐๐ฅ๐ ๐ง๐๐๐๐๐ก๐ ๐ง๐๐ ๐ง๐ฅ๐จ๐ง๐
The September 15 extended filing deadline has just passed for many partnerships and S corporations.
But there is an important lesson for business owners that goes beyond meeting a filing deadline:
๐ ๐๐ฎ๐
๐ฟ๐ฒ๐๐๐ฟ๐ป ๐ถ๐ ๐ผ๐ป๐น๐ ๐ฎ๐ ๐ด๐ผ๐ผ๐ฑ ๐ฎ๐ ๐๐ต๐ฒ ๐ณ๐ถ๐ป๐ฎ๐ป๐ฐ๐ถ๐ฎ๐น ๐ฟ๐ฒ๐ฐ๐ผ๐ฟ๐ฑ๐ ๐ฏ๐ฒ๐ต๐ถ๐ป๐ฑ ๐ถ๐.
I recently worked on a real bookkeeping cleanup where the financial records initially showed more than $800,000 in business profit.
If those numbers had simply been accepted and used for tax preparation without reviewing the underlying transactions, the tax picture would have looked dramatically different.
After going through the books, reconciling accounts, reviewing transactions, correcting classifications, and properly accounting for business activity, the true financial position was completely different โ the business was actually showing a loss.
Think about that for a moment.
Same business.
Same bank accounts.
Same transactions.
But a completely different financial picture once the books were properly reviewed.
This is why bookkeeping should never be treated as simply downloading bank transactions into accounting software and selecting categories.
Incorrect bookkeeping can lead to:
โข Overstated income
โข Understated legitimate business expenses
โข Incorrect asset and liability balances
โข Loan transactions being recorded incorrectly
โข Duplicate or missing transactions
โข Unreconciled bank and credit card accounts
โข Financial statements that do not reflect the true business position
โข Tax returns prepared from inaccurate information
Sometimes business owners try to save money by handling the books themselves. For a very small and uncomplicated business, that may work for a while.
But as a business grows, transactions become more complex.
The question then becomes:
๐๐ผ๐ ๐บ๐๐ฐ๐ต ๐ฐ๐ผ๐๐น๐ฑ ๐ถ๐ป๐ฎ๐ฐ๐ฐ๐๐ฟ๐ฎ๐๐ฒ ๐ฏ๐ผ๐ผ๐ธ๐ ๐ฒ๐๐ฒ๐ป๐๐๐ฎ๐น๐น๐ ๐ฐ๐ผ๐๐ ๐๐ต๐ฒ ๐ฏ๐๐๐ถ๐ป๐ฒ๐๐?
Before filing a business tax return, take time to ask:
1. Have all bank and credit card accounts been reconciled?
2. Are major transactions classified correctly?
3. Do loan and liability balances make sense?
4. Have business assets been properly accounted for?
5. Does the Profit & Loss Statement actually reflect what happened in the business?
6. Does the Balance Sheet make sense?
7. Has someone knowledgeable reviewed unusual or significant transactions?
Having bookkeeping and tax knowledge working together can also be extremely valuable because unusual numbers in the books can be investigated before they flow into the tax return.
Tax preparation should not simply be about entering numbers onto forms.
Sometimes the most important work happens ๐ฏ๐ฒ๐ณ๐ผ๐ฟ๐ฒ the tax return is prepared.
Business owners: Do you have your financial statements reviewed before your business tax return is prepared?
