5 Small Business Bookkeeping Tips

November 6, 2020

As a small business owner, bookkeeping can be the last thing on your mind. Yet there are endless advantages to staying smart about bookkeeping and subsequently avoiding issues such as IRS audits. Use these small business tips from your Los Angeles tax consultants to streamline the bookkeeping process. 

Remember to Separate

Personal expenses do not belong anywhere near your business expenses. Keep them separate in different accounts to prevent confusion at the end of the tax year. You do not want to accidentally write off a personal expense and face an audit. 

Make Quarterly Reviews a Habit

Review your financial records, including all bookkeeping information, in exhaustive detail at the end of each financial quarter. Identify issues such as declining product sales and customers who refuse to pay on time, as well as positives such as increasing service sales and good year-over-year comparisons. The more you know about each quarter performance, the easier it will be to make smart financial decisions. 

Use Quality Software

Simplify the bookkeeping process by installing software that automates everything you need, well, automated. It’s a good idea to do so after working with a professional, as an Encino tax consultant can set your business up and recommend software that offers the most benefits for your business. Remember to back everything up to avoid losing important financial information in the event of a digital problem. 

Record All Expenses

Keep track of all of your expenses so there aren’t any deductions you’re missing during tax season. Advertising and marketing materials, equipment and tools, assorted supplies, utilities, internet connections, travel expenses, business meals, and transportation costs are among the deductions you’ll want to make on your tax return. 

Know Your Tax Deadlines

Stay up-to-date on all applicable tax deadlines to avoid turning paperwork in late and facing fees. The sooner you send your tax information in, the sooner you will receive any eligible refunds. If deadlines are not your strong point, use the business tax calendar from the IRS for reminder notifications. 

For more about Los Angeles accountant services, please contact Wallace & Associates today.