QuickBooksGal

Regardless of the size of your company, good bookkeeping practices are essential to keeping your business running smoothly. Accurately kept books do more than make it easy to file your annual tax returns. Banks may require you to submit a profit and loss statement or balance sheet so they can determine your credit-worthiness. A quick review of your books can show where you need to spend more or less money, who gives you the most business and who takes the longest to pay you, and how much you're paying out in commissions compared to how much you're selling. Here are some general terms that are helpful to know: ASSETS are things that you own or are owed to you: bank accounts, inventory, loans made to other companies or individuals, company cars, etc. LIABILITIES are things that you owe: loans, accounts payable, payroll taxes, etc. EQUITY is net income (sales less expenses), capital stock and owners/officers distributions. EXPENSES are the things you pay for: business...

It's the NEW YEAR and it's the perfect time to get your personal or your business's finances in order. Whether you do your own bookkeeping, or you have a hired bookkeeper, why is it important to have good bookkeeping? Mandated Reporting & Compliance Budgeting & Forecasting Loss and Waste Control Collections Helps you to determine when/if you need employees or more employees The ability to see the BIG picture -- Know when to expande, when to hold steady or downsize Provides the ability to demonstrate performance to future investors or lenders What constitutes good bookkeeping? Where can you start? How can you make sure you're on the right track? Here are some quick tips: Open a dedicated business checking account Do NOT co-mingle funds --Spend only from the business account for business expenses; deposit business receipts only into that account; NEVER deposit directly into your personal bank accounts Keep ALL receipts If you must make purchases f...

Recently, a client asked me about the IRS and what they might look for in an audit. * He keeps great records and is very careful not to "co-mingle" funds. * All cash received is deposited to the company business checking account. * And, in an effort to better control cash purchases, he has opened a separate bank account that he funds periodically from the business operating account. * He then carries the ATM debit card for that account and makes "cash" purchases with that card. * Additionally, all workers are either employees or licensed contractors. I found a great article from Wells Fargo that I think provides a great check list for some of the most common issues the IRS may consider when reviewing a business file in an audit. Here is an excerpt from that article: In the case of audit, be aware that the IRS training manual tells its auditors that they are examining you, not just your tax return. The auditor wants to see how you match up with the incom...