1) Keep Your Personal & Business Banking Separate
- Makes Bookkeeping Easier: It’s much easier to identify business expenses when you have a separate bank account for those expenses.
- Note: If you’re concerned about monthly fees find a bank that doesn’t charge fees. A Local Credit Union is a good place to start researching for a business financial institution.
- Have Clear Insight: With your expenses separated and easily accounted for, you can gain clear insight with reporting. Having reports available, will help you make timely decisions for your company.
- Makes Tax Prep Easier: Being able to separate business from personal is important — especially if you end up facing an audit.
2) Receipt Management
- Be Prepared for an IRS Audit: Your CPA may not need those receipts but they are crucial when faced with an audit.
- Receipts not Bank Statements: IRS will not accept Bank Statements as receipts, you need to keep the details of your transactions.
- How long should I keep my receipts? Depending on the type of document, action, or event the document supports. It ranges from 3-7 years.
- Online Receipt Management: Keeping track of receipts and statements can be daunting. Consider an online receipt management app, like Hubdoc to make this process of document management easier.
- Stored in the cloud
- Easy access anytime, from anywhere
- Prevents loss from ink wearing off
3) Keep your Bookkeeping up-to-date
- Keep a Schedule: Easier to manage if you update it weekly, set a schedule and stick to it
- Is it Complicated?: If you have a complicated business with several assets and/or loans consider outsourcing
- Don’t Wait til the Last Minute: Avoid the mad dash to file your taxes
- TIP: If you are just starting out and concerned about cost, try a free bookkeeping app like Wave
4) Understand your Financial Reports
- Monthly: Review the 3 main reports monthly
- Income Statement
- Balance Sheet
- Statement of Cash Flows
- Research/Training: Do your research to make sure you understand what these reports mean to your business
- Decision Making: Make sound business decisions based off of your financials
5) Pay your Estimated Quarterly Taxes
- Quarterly Tax Requirements: Applicable to Sole Proprietors, Partners, LLC., and S corp shareholders who expect to owe tax of $1,000 or more
- Avoid Penalties: Be sure to have reminders setup or outsource this task so your reports are filed timely and your payments are made on time to avoid penalties.
- Stay in Touch: Don’t be caught off guard with a large income tax payment, stay in touch with your tax reports and prepare yourself for your end of year tax expenses.
Our professional bookkeepers are detail-oriented and verify transactions to ensure proper record keeping. To schedule a free consultation with our friendly and knowledgeable bookkeepers, call us today at 435.940.5534 or click on the link: SCHEDULE A FREE CONSULTATION