09/17/2026
𝗕𝗘𝗙𝗢𝗥𝗘 𝗬𝗢𝗨 𝗙𝗜𝗟𝗘 𝗧𝗛𝗘 𝗧𝗔𝗫 𝗥𝗘𝗧𝗨𝗥𝗡, 𝗠𝗔𝗞𝗘 𝗦𝗨𝗥𝗘 𝗧𝗛𝗘 𝗕𝗢𝗢𝗞𝗦 𝗔𝗥𝗘 𝗧𝗘𝗟𝗟𝗜𝗡𝗚 𝗧𝗛𝗘 𝗧𝗥𝗨𝗧𝗛
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:
𝗔 𝘁𝗮𝘅 𝗿𝗲𝘁𝘂𝗿𝗻 𝗶𝘀 𝗼𝗻𝗹𝘆 𝗮𝘀 𝗴𝗼𝗼𝗱 𝗮𝘀 𝘁𝗵𝗲 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗿𝗲𝗰𝗼𝗿𝗱𝘀 𝗯𝗲𝗵𝗶𝗻𝗱 𝗶𝘁.
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 — 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:
• Overstated income
• Understated legitimate business expenses
• Incorrect asset and liability balances
• Loan transactions being recorded incorrectly
• Duplicate or missing transactions
• Unreconciled bank and credit card accounts
• Financial statements that do not reflect the true business position
• 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:
𝗛𝗼𝘄 𝗺𝘂𝗰𝗵 𝗰𝗼𝘂𝗹𝗱 𝗶𝗻𝗮𝗰𝗰𝘂𝗿𝗮𝘁𝗲 𝗯𝗼𝗼𝗸𝘀 𝗲𝘃𝗲𝗻𝘁𝘂𝗮𝗹𝗹𝘆 𝗰𝗼𝘀𝘁 𝘁𝗵𝗲 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀?
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 𝗯𝗲𝗳𝗼𝗿𝗲 the tax return is prepared.
Business owners: Do you have your financial statements reviewed before your business tax return is prepared?
