If you own a business, you know how little time you have to do everything. As a business owner, you have to stay on top of your finances, inventory, customer service, marketing, and more. Who has time to dig through individual receipts during tax season with all that to worry about? Bookkeeping is a necessary task for all businesses. It helps you manage your operations, plan ahead, and prevent an IRS audit. Here are some small business accounting tips to save time and boost profits.
Accurately Record Income
Loans, profits from sales, and other revenue can be easy to lose track of, but keeping up with your incoming cash flow is essential. If you neglect this step, you could end up underpaying your taxes, and that can lead to IRS penalties. Your accounting method will determine exactly when to record income and expenses.
Track All Expenses
Speaking of expenses, it is critical to always save and track costs incurred for your business needs, including labor, salaries, and incentives, purchases, logistics, inventory, etc. When you correctly record expenses, it is easier to identify which costs are consuming a more significant percentage of your business funds. It will also help identify anything that is not contributing to the positive growth of your business.
Open a Business Bank Account
You may be able to get by combining your business and personal accounts initially. But, there will come a time when mixing these accounts does more harm than good. Having a business bank account keeps records separate and will save a lot of time come tax season. It also protects your personal assets in unexpected cases of bankruptcy, lawsuits, or audits. And if you want funding from creditors or investors, strong business financial records can increase your chances of approvals.
Consider Hiring a Professional
If your business is still young, you may be able to get by doing your own bookkeeping. But, as your business grows, you will have less time to spend on accounting tasks. So, hiring a professional accountant or bookkeeper can be extremely beneficial. Some key benefits of hiring a professional include:
- Keeps your records up-to-date.
- Handles complex financial issues.
- Assist in meeting all your financial goals and aspirations.
- Assist in filing taxes and getting tax deductions.
- Helps with strategic planning.
- Identify certain financial loopholes in the organization.
We here at Bowman & Company are proud to be a small business serving other small businesses. Our skilled accountants and financial planners want to help you lower your taxes and increase your net worth through responsible, proactive, and accurate recordkeeping. Contact us today to learn more.
Contact Bowman & Company CPA Today
Bowman & Company CPA, PC provides all of our individual and small business customers with experienced, accurate, and affordable financial services. Our financial services aim at decreasing your taxes and increasing your net worth through responsible, timely, and accurate recordkeeping. We offer our services to clients throughout the Washington, D.C. metropolitan area including Maryland and Baltimore County, Columbia, and Howard County. For more information on our offerings, contact us online or call us at (410) 381-8121. You can also find us on Twitter, Linkedin, Facebook, and Youtube.