Small Business Accounting Tips to Save You Time and Money

While some people may want to do their small business accounting on their own at the beginning, hiring an experienced accountant is advisable for the end run. Bookkeeping is necessary for all businesses and it helps you to manage how your company runs, to plan ahead and to prevent an IRS audit. In order to keep moving to improve your profits, follow these small business accounting tips listed below.

Separate Expenses

All business and personal expenses should be separate with a dedicated bank and or credit account for your business. This makes it easier to tally up business expenses and takes the guesswork out of the experience. This helps to limit your legal exposure to business debt too if you have a limited liability company. If you use a property for both personal and business use, you generally can deduct a percentage of it on a business tax return. Deducting personal expenses is not allowed. The penalty for deducting what is not allowed for taxes can be as high as 75% of the additional tax owed.

Tracking Expenses

It’s important to categorize each expense to track cash flow to make sure that you get the most write-offs. Use your business credit cards for purchases and you won’t have a stack of receipts to sort through at the end of the year. You also get cash back or rewards for your spending on certain credit card providers, thereby saving you more dollars each month of spending. Accounting software can store invoices that you’ve paid and copies of checks too, to help keep accounting records up to date throughout the year.

Recording Income

Revenue from sales, loans and other cash acquisitions can be hard to keep track of for a business of any size. However, you need to organize all incoming cash flow. If you don’t accurately document it, you could underpay your taxes, which can lead to large IRS penalties in the long run .

Call to Schedule a Free Consultation With a Professional Accountant Today

If you're interested in learning more about small business accounting to ensure your business is protected, call to schedule a free consultation today with Daleyn Accountancy. Call us at 818-696-0866 and let us help you create a plan for a merger or acquisition that takes your company in the right direction. We serve Encino, Los Angeles, Thousand Oaks, Camarillo, Agoura Hills, Woodland Hills, Calabasas and surrounding communities.