What Your Accountant Wishes You Had Tracked All Year
Eight things. Seven of them can be rebuilt in April, expensively. The eighth cannot be rebuilt at all.
An accountant does not want more of your time. They want the year to arrive in a state where the work is checking rather than archaeology, because archaeology is billed by the hour and the answers are worse.
This is the last post of the month, and it is the one the other thirty were quietly building towards.
The Money Mastery System dashboard showing a year closed out. Example data.
The short version
Eight things your accountant needs, kept as the year happens.
Seven can be rebuilt in April at a cost. Mileage cannot be rebuilt reliably.
Rebuilding costs more than the hours: the answers are worse and the bill is higher.
Keeping records monthly turns tax season into checking.
The eight
What | What it proves | What it costs to rebuild in April |
|---|---|---|
Income, split by source | What you earned and from where | Hours of statement reading, and the split is usually guessed |
Expenses, categorized as you went | That each deduction is real and correctly placed | A weekend, and the categories end up rougher |
Business versus personal, on every line | That you are claiming what is yours and not what is not | The single most expensive thing to reconstruct |
Receipts, attached to their transactions | The deduction, if anybody asks | Impossible for anything you did not photograph |
Mileage between work locations | A deduction people routinely miss | Cannot be reconstructed honestly, only estimated |
Home office basis | The square footage or the simplified figure | Ten minutes, if you measured once |
Equipment purchases with dates | What may be depreciated and from when | Findable, but only if you kept the receipt |
Cash | That it was income, and that it was declared | Nothing rebuilds this. It is gone or it is recorded |
The last row is the one to read twice. Everything else on this list leaves a trace somewhere. Cash leaves a trace only if you made one at the time.
Why April reconstruction costs more than the hours
Three reasons, and the first is the one nobody expects.
You will claim less. Reconstructing from statements, people consistently miss deductions they would have caught at the time. The small ones, the part-personal ones, the ones that needed a note. That is real money, and it is money lost quietly.
The categories get coarser. In April, a supplier payment becomes "supplies". In March, you knew which job it was for. That detail is what makes a Profit and Loss tell you something rather than just total correctly.
Your accountant charges for the archaeology. Most of them would far rather spend that time on advice that saves you more than the fee. They cannot, because they are sorting.
What the whole month has been about
If October had one argument, this is it: every difficult financial question is easy when the underlying record exists, and impossible when it does not.
Which of your services make money needs income split by service. Whether the year actually worked needs a margin. Your tax set-aside percentage needs a real profit figure. Whether to raise prices needs to know which clients are worth protecting.
Not one of those is a hard question. They are all the same easy question asked of a record that either exists or does not.
This is what the paid membership is for
We have been careful all month about where to say this, and here it is the whole post.
Every row in that table is something Rise does as you go, for $49.99 a month. Income split by source. Expenses categorized, with Clarity remembering how you sorted something last time so the second month is faster than the first. Business and personal separated on every line. Receipts attached to their transactions rather than filed somewhere else. A Profit and Loss that builds itself out of all of it.
Twenty minutes a week, which is the whole job, timed.
La Soglia, the free membership, is genuinely free and genuinely useful: everything you own and everything you owe in one place, personal and business together, no bank connection and no card. It will not do the eight things above. That is the honest line between them, and it is the same line your April is drawn on.
A year of transactions categorized, with the Profit and Loss beside it. Example data.
If you are reading this in April instead
Start with this week, not with January. Get the current week clean so the pile stops growing, then work backwards a month at a time. The catch-up is about eleven hours for nine months and starting at the oldest month is how people give up in February.
Bring it to the Collective
Ask your question in the discussion feed before you ask it in April at an hourly rate. The Money Mastery Collective is open on the free membership.
Questions we hear
My accountant has never asked for most of this.
They have adapted to what they receive. Ask what they would prefer, and the answer is usually the list above.
Is it too late for this year?
No. Two months of clean records is better than none, and it makes next January materially easier.
What if I use an accountant for everything?
Then this list is exactly what makes their work cheaper and better. Nobody can categorize your own year as accurately as you can.
Which one matters most?
Business versus personal on every line. It is the hardest to reconstruct and the one with the most at stake.
What records does my accountant need?
Income by source, expenses by category, mileage, receipts for larger purchases, estimated tax payments, home office figures, contractor payments and loan statements.
What should I track for taxes as a self-employed person?
Everything the business received and spent, with the date and purpose, plus business miles as you drive them.
References
This list is our own. There are no outside figures in it.
Related guides: How to do your own bookkeeping, step by step · Home based business bookkeeping: a one-page checklist · Where does my money go? A simple money tracker.
Start free with La Soglia
La Soglia is the free membership of the Money Mastery System. It gives you the Net Worth Tracker, where everything you own and everything you owe sits in one place, and the Money Mastery Collective. There is no card to enter and no bank connection.
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A note on what this is
This article is educational. The Money Mastery System is an educational tool, not financial software, and nothing here is legal, tax, investment or financial advice. What your own accountant needs depends on your entity, your sector and your jurisdiction, and record requirements vary. For guidance on your own circumstances, please speak with a qualified professional who knows them.
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