Running a business can be overwhelming. You have to be a strong multitasker who can juggle a dozen issues at a time and wear a multitude of hats. You’re not just the visionary who started the company and the engine that keeps it going: You’re also the patient gardener, tending to the little things that need to grow slow and healthy to keep your business going. And without strong business accounting tips and habits, your business won’t grow the right way. Or at all.
Good and accurate accounting is crucial for the success of any business. At Hacker Accounting, our expert bookkeepers and accountants have the skill and knowledge to help any business stay on the right financial track. Here are five of our business accounting tips that you can use to help your small business.
Licenses and registration
A critical mistake that many small businesses make is that they don’t file the proper forms with the government. You have to make sure that your state and city government licensing and registration is in order. If it isn’t, you could be facing fines and other problems down the line.
Bringing in one of our accountants early on in your business’s development is a wise move: We can look over the steps and let you know if you missed a step. When it comes to the delicate dance between government and business, you don’t want to lose the beat and end up stepping on the wrong feet if you want your business to keep moving.
Don’t co-mingle accounts
Keep separate bank accounts for your business. You do NOT want to mix your personal and business transactions. This could make doing your taxes a nightmare, especially in the event of an audit where the burden is on you to prove that all your deductions are actually business related and not personal expenses.
If you need to use cash for minor daily expenses, use petty cash. Avoid using cash to pay your bills or inventory. Using checks and credit cards allows you have a record of the purchase. It’s too easy to lose receipts with cash transactions or to forget that you even did the transaction in the first place.
You should get documentation on all of your business transactions. It doesn’t matter how minor the expense or invoice, every single transaction should be recorded and documented. It isn’t enough to just record amounts in your books. You need to know what that money went towards; Otherwise months from now you’ll be pouring over your books and wonder where your money’s been going.
File your receipts and documentation in an accessible place. Organize them so that your documents will be easy to find. When possible, backup critical documents like tax information. Having backups is important in case you need to do research later or if you get audited by the IRS.
Don’t be afraid to write things off come tax time! As a small business owner, you’re pouring your heart and your finances into getting your business going. Any money you can get back is needed and necessary to keep yourself and your work healthy. You just have to be careful not to write off the wrong things.
Don’t be too aggressive with writing off dining expenses and entertainment. These two things are red flags for auditors. Focus more on writing off equipment expenses, driving, health care, child care and other expenditures. Talk to one of our accountants so you can be sure that your deductions are viable and won’t get called into question later.
Get More Business Accounting Tips
Does your small business need accounting advice from reliable, experienced accountants that you can trust? Hacker Accounting can help you and your business stay on top of things! Give us a call at 602-375-5251.