If you own a small business, one of the biggest dilemmas you have to solve is whether to do your bookkeeping on your own or to hire someone to do it for you. It is important for business owners, big or small, to know at least the basics of bookkeeping and accounting, so they know how their business is performing at all times. Doing your own bookkeeping is definitely more cost-effective, but learning the ins and outs of accounting can be challenging. Here are some easy tips to get you started.
Keep Track of Expenses
It is essential to keep track of all your business expenses so you are aware of what you can and cannot claim on your taxes. To be able to deduct expenses from your taxes, you have to prove that they were necessary for your business. Some common expenses you can claim include:
- Office supplies: such as stationery, printer ink and postage fees
- Business premises: like rent, maintenance, insurance, utilities, etc
- Travel: including insurance, fuel, hire charges, breakdown cover and servicing. This also includes any costs from traveling by train, bus, plane or taxi and hotel rooms as well.
- Clothing: such as a uniform or protective clothing
Get an Accounting Software
Gone are the days of manually updating spreadsheets and ledgers. Numerous cloud-based accounting softwares can automate some of those repetitive tasks. For example, this allows you to sync your bookkeeping software with your business bank account, so you always have accurate, up-to-date records. Additionally, with the cloud, your critical financial data is backed up safely.
Keep Records of Everything
It is essential to keep all receipts, bills, invoices, bank statements and organize them efficiently, so you always know where they are. This may seem like a daunting task, but it will benefit you when tax season rolls around and you have to go over all your finances. Without the correct information, you run the risk of filing your taxes incorrectly and may owe the IRS.
It can be easy to put off doing your bookkeeping to the last minute, but the longer you wait, the more difficult it will be. To avoid running out of time, plan ahead and set aside money for any anticipated tax bills. Then, pay on time, so you don’t face fines. In addition, the IRS website’s tax calendar for businesses can sync with your cloud-based calendar, so you never miss a deadline.
Contact Bowman & Company 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.