Five Bookkeeping Tips for Business Owners

Entrepreneurs keep in their hands a lot of financial details of their business. This has bookkeeper advantages, there are no new software to study, there is no risk of a system failure that loses all your data and you can change your budget as often as you want without sitting at your desk.

But when you do not have a system and some processes in place, unpleasant surprises can arise, goals can be easily forgotten and important documents forgot. Getting the best management of your money can help you achieve and maintain your long-term goals, mitigate seasonal fluctuations in your cash flow and improve your profits. This will also help you avoid problems with the Internal Revenue Service.

Here are five tips for accounting for entrepreneurs.

  1. Plan your basic expenses.

Because this is useful:

You have less chance of losing business opportunities or refusing a loan when expenses become inevitable.

What to do:

Put events as the primary upgrade of your computer in the calendar for the current year, or ideally three to five years in advance. Recognize the highs and lows of the season many entrepreneurs are reluctant to do.

Avoid taking money out of business during hunting periods to find you in the slower months when usually expensive projects such as updating computers or replacing factory components occur.

  1. Spend your expenses.

Why is this useful?

You run the risk of losing taxes and losing others.

What to do:

A credit card used only for businesses can be a basic accounting system, says Raffaele Marie, abookkeeper, who teaches a financial course for entrepreneurs at Pepperdine University.

Most card statements classify your expenses, so you can see what costs are related to that activity. If you still use your corporate credit card for business expenses, you are less likely to pay in cash, for example, Staples and losing your receipts, which will lead to a loss of tax deductions. Handles and paper can be folded.

Additionally, says Marie, regularly check business trips, lunches, coffee dates, and other events with cash costs in your diary or diary. This habit can greatly help demonstrate these elements for your tax returns in case of verification.

“Often in tax declarations, these figures are too rounded: for one year no one has exactly 5000 miles for business, so the IRS knows it’s an assessment,” says Marie. “When you check, if you can not justify these figures, the whole category of radiation can be rejected.”

One of its customers provides a link to Google’s map for each trip, instead of remembering to record the mileage for each trip that takes its odometer. This data, along with a diary scheduler that records a trip, is usually enough to store records to meet the IRS, says Marie.

  1. Save the deposits correctly.

Because this is useful:

You are less likely to pay taxes on money that is not income.

What to do: Take a system to keep your financial performance, whether it’s a regular laptop, an Excel spreadsheet or a software like QuickBooks. Business owners generally carry different deposits on their bank account during the year, including loans, sales proceeds, and cash from personal savings. The problem, says Marie, is that at the end of the year you or your bookkeeper can save some deposits as income and then pay the taxes on more money you have made.

  1. Put aside money to pay taxes.

Because this is useful:

The IRS can impose fines and interest in not having submitted quarterly tax regimes in a timely manner.

What to do: Always invest money during the year for taxes. Then pay attention to the tax periods of your calendar, as well as the preparation time, if you need to make sure that you make payments on your arrival.

  1. Monitor your accounts.

Because this is useful:

Late and unpaid bills have damaged cash flow.

What to do:

Assign someone to the organization to track billing. Then proceed to the process of compiling the second account (bookkeeper), make a phone call, and possibly impose a penalty, such as additional fees for certain hours.

“Do you want to have a plan for what happens if I’m late for 30, 60 or 90 days,” says Marie.

Some entrepreneurs believe that by sending an invoice, they are billing. That’s not the case, “said Marie.” Every late payment is an interest-free loan and hurt you. ”

Check out this link for more informations: https://www.entrepreneur.com/article/219517

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