Here Are Some Basic Bookkeeping Tips to Keep You From Ripping Your Hair Out For Next Tax Year
Assets = Liabilities + Owner’s Equity: the infamous equation of small business bookkeeping, the Achilles heel of your business.
If you’re a small business owner, it’s probably safe to say you don’t enjoy doing the books. Let’s face it; you are good at everything (sales, marketing, management, etc) except for the nitty gritty and least fun part of owning a business. You’re too busy creating income so bookkeeping gets placed on top of the list of dreaded chores.
Luckily there are softwares like Quickbooks, Sage, Quicken, Xero that are extremely helpful in saving time, but the question remains how do you prepare yourself to ensure a (somewhat) seamless process for next year? Even though tax time is over, it doesn’t mean you can sit back and relax just yet.
- Keep track of your expenses and invoices while making sure you’re following the GAAP standards. Categorize, categorize, categorize. This will help your keep track of how much money is going out, where it’s going to and what money is coming in.
- Remember to classify employees. As an employer, you’re responsible for managing employee forms such as W-4s and I-9s, and keep in mind there are different rules and regulations for independent contractors, consultants and freelancers.
- Plan for major expenses. Set aside money for oncoming projects, expenses and expenditure, especially money to pay your taxes.
- Outsource your bookkeeping as soon as your books make sense to you. The biggest mistake most small business owners make is to do it themselves. As soon as your books are somewhat reconciled, it’s beneficial to outsource your bookkeeping to a professional with skills and a second set of eyes to manage and scan for errors.
- Cut time, not corners! Errors can cost your company significantly, so make sure you’re not misfiling by going over these errors ahead of time.
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