The first step when working with a new accountant is to create a reliable and accurate budget, which depicts both your income and your expenses. For many, this can be an arduous task -- to create a completely accurate picture of your finances, you need to be able to go back at least three to six months in time (and often, a full year). Here are a few of the methods that you can use:
Downloadable or Paper Statements
For those who complete the majority of their transactions on debit cards or credit cards, downloadable and paper bank statements are usually the best. Collect all your statements and then go over them one by one to write notes next to any vague line items -- otherwise your accountant won't know what it was for.
If you're computer savvy, you can download your bank statements and add them up by expense line item prior to your meeting with your accountant.
Collected Receipts and Invoices
Though it's best to use statements, that's not always possible... especially if you're the type of person to make payments in cash. For those who complete many cash transactions, it's often better to collect receipts and invoices for a certain period of time (at least three months). There are smartphone apps that can help you track these items digitally so that you don't need to keep a large box of paper. Alternatively, you can enter each expense into a spreadsheet on your computer as they are paid.
Prior Year Tax Forms
If you have neither statements nor receipts, your prior year tax forms can give you basic information that your accountant can extrapolate from. If you were doing your taxes through an accountant at the time, it's likely that they have attached spreadsheet schedules that will show basic income and expense information. Though it will not be detailed, your accountant can help you break your annual expenses into monthly expenses and, at very least, determine areas in which you can improve.
While you can use any of these methods to create an income and expense sheet for your accountant -- which they will then work with you to improve -- you should try not to mix methods. If you use, for instance, both your receipts and your bank statements, it's very likely that you will duplicate income and expenses without realizing it, leading to inflated numbers. It's better to identify the most complete record you have and then work with that record from then on.
To learn more, contact a company like Myron E Triska Chartered Accountant with any questions you have.