Tax Season

As I sit here I am writing you during the busiest time of the year for me:   tax preparation season.

Several steps must be taken during this time of the year.  For one, yearly statements must get out to the parents while business and personal taxes must be preparedfor filing.  There are 4th quarter tax payment reports to be reviewed – verifying that money is available to make the payment, along with making sure the staff’s w2’s are prepared and ready for disbursement.  Whew!  That’s a lot of workto be completed; and all in a timely manner.

Not only that but according to your accounting method you will need to generate your accounts receivable report for your accountant.  Your accounts receivable report is submitted for all accounts that are outstanding.  In the childcare/daycare industry several times we care for children on an “I OWE YOU” basis.  Of course working with parents financially can help or hurt your business but you must be the judge of that. 

Why should you submit the accounts receivables?

When parents withdraw from your daycare/childcare with outstanding debt, and they have not responded to your collection procedure at the end of  the tax year, you may write it off  as bad debt.

Of course I am not an accountant; this is a just a little bit of information that my accountant and I have discussed. My advice is that you speak with your accountant about “bad debt” , decide whether or not you have selected the right filing status and determine if you should use the accrual accounting or cash flow method.

If you are new to the terms accrual accounting, cash inflow or cash out flows, you will find it very interesting to do your research.

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Remember Manage The Childcare Business You Love and Love The Childcare Business You Manage!

Much To Your Success!