Inside of Bookkeeping Made Simple, I walk you through exactly how to do this in your own bookkeeping, and it's super quick and easy to do. This is the method that we use for all of our clients as well, and it takes us only about five minutes to record an entire month's worth of sales data. And we know it's right because we're pulling it directly from our point of sale system and accounting for all of those pieces separately. So just a quick recap, a 1099k is essentially a reference tool that may or may not be sent to you by all of the companies you use to help collect payments from your customers. Your tax return does not need to report the exact number on your 1099k.

So by using the finances summary report or whatever equivalent report your payment processor or your point of sale system may have, I know Square has like a sales summary report, those are the two that I'm most familiar with. But by using the numbers that are reported on those reports and using those reports to add the accurate number into your bookkeeping records, when tax time comes, you can accurately account for the total sales revenue that you actually collected. You can claim all the refunds you paid out, all the sales tax you collected won't be grouped in with your income, and you'll be able to claim and deduct the processing fees that the payment processor charged you because you accounted for each of those items separately in your bookkeeping.

So the attention is reviewing your numbers and checking in on your financial health. This is something you should be doing all the time because your business deserves that attention. It's not that attention just at the beginning of the year. It's not that attention just for tax time. This is something that you need to be doing year round. Reviewing your P&L is how you make sure that you're paying attention to your business and making sure that you're giving it the proper attention that it needs. Next, we have communication. Looking at your financial statements in the same way that you've listened to a partner or a spouse or someone who's important to you.