Bookkeeping Tips

Keeping good records is essential to running an efficient and successful business. If your records aren't in good shape and easy to understand, your business could fall apart.

Consistency and simplicity
Request that your bank account statements be shown with month-end cut off date. Column titles should be the same each month through the year and simplify categories when possible, instead of listing supplies separately, list it under 'office supplies'.

Cash or Accrual Accounting System
Cash is much simpler; use the accrual method only if you have $5 million in sales or carry a large inventory.

Deposit Payments as Soon as Possible
Deposit income immediately as it is received to record date receive accurately.

Keep in mind, you are taxed on profits only
Many people believe that they are taxed on all of the money they take out of their business, but sole proprietors are taxed on the profits of the business, not the revenue.

Setup Due-Date Reminders
Follow a check-off list of all the required payroll tax reports, include due date, type of tax, report number, government agency, period covered; indicate if money, report, or both need to be submitted.

Paid Invoices Should be Filed for Each Year Separately
Start a new file folder for each year for paid invoices and paid bills organized by customer. After taxes have been filed for the year, put all of your records together including that year's tax return.