If you’re worried about the IRS getting involved with your business, there are five bookkeeping tips to help you ensure your business succeeds
- Be Prepared For Major Expenses
You’re not going to miss any business chances or need to get a loan if you plan for major expenses ahead of time. For example, if you need a new computer, consider putting that purchase on hold (if you can) for one year. Be mindful of the seasonal ups and downs so you’re not caught off guard when things go downhill for a time.
Don’t take out any money during the rush periods so that you can handle the slower months when they hit or when you have to do expensive repairs.
- Track Your Expenses
Be sure to keep an eye on your expenses, especially if you want to take advantage of the tax write-offs. For example, use just one credit card for the business. The majority of card statements have expenses categories, allowing you to see the business activities. If you use a credit card to pay for business expenses, you’ll be able to take advantage of tax-time write-offs.
It’s also important to write down information pertaining to the business – coffee dates, lunches, business trips, etc. – so if you’re ever audited you can prove your claim.
- Properly Record Your Deposits
Be sure you have a system that keeps track of your financial activities – QuickBooks, Excel spreadsheet, a notebook, etc. Businesses tend to make lots of deposits in their bank accounts – loans, sales revenue, personal savings cash, etc. If you don’t write down the deposits, you could actually claim more in deposits than you actually had.
- Put Money Away To Pay Your Taxes
If you don’t pay your taxes every quarter, the IRS can levy interest and penalties against you. Be sure you put money aside each month to pay those taxes and keep track of the IRS due date deadlines and make those payments when they are due.
- Keep An Eye On Those Invoices
Be sure your billing is taken care of. If you have to, hire someone to do this for you. If you have late bills to contend with, be sure you have a plan that deals with them. Have a plan that will issue a second invoice to include penalties and fees if you’re not paid by the deadline.
Keeping accurate bookkeeping records is extremely important to your business’s survival and to ensure you stay off the IRS’s radar for audits. So, be sure you implement the five tips above to stay out of trouble and keep your business thriving.