Precision Corporate Services

Business Bookkeeping

Posted on Monday, September 13th, 2010 at 7:06 am.

Keeping up with bookkeeping is essential to running a successful business. Sometimes it can seem a bit overwhelming as a new business but once you get started and do it right it can be the easiest part of running your own business whether it’s an online internet business or a local shop. Precision Corporate Services, in St. George, Utah offers a professional bookkeeping, and tax help services to small businesses and we are offering you a few tips to help you keep your business running or to learn more about our services about tax advice, free tax consultation, or business audits visit us online at www.precisioncorpsvcs.com.

BANK ACCOUNT STATEMENTS

• request a statement with a month-end cut-off date
• saves time when reconciling records with the bank statement every month
• fewer checks you will need to record as outstanding
• don’t file statements and canceled checks without reviewing them
• review statement immediately for unauthorized checks

BE CONSISTENT

• consistency is essential to successful business bookkeeping
• head your columns the same way each month thru the year
• will save you and your accountant time and aggravation

CASH OR ACCRUAL

• cash accounting system is much simpler
• IRS only allows you to use accrual method if you have $5 million in sales or if you carry a large inventory

DEPOSIT CASH RIGHT AWAY

• deposit all cash immediately at bank or credit union once it is received
• ensures that all income will be properly recorded

DEPOSIT TICKET BOOKS

• record your daily deposit in a deposit ticket book
• come with a white (original) copy and yellow (duplicate) copy
• give the white copy to the bank and leave the duplicate in the book

DO NOT OVERCATEGORIZE

• most of us tend to make things harder than they need to be
• don’t need separate categories for paper, pencils, printer cartridges, etc.
• all these items can simply be listed under “office supplies”

DUE DATE REMINDERS

• it’s a good idea to follow a payroll tax due date reminder
• whether you have a payroll service or you’re preparing returns yourself
• follow a check-off list of all the required payroll tax reports
• include due date, type of tax, report number, government agency, period covered
• also indicate if you need to submit money, a report, or both

FILING PAID INVOICES

• start new file folders each year for paid invoices and paid billsdon’t need a folder for each customer or unless large volume of business
• get by with a folder for all customers from A – C, D – F, and so on

FROM PAPER TO COMPUTER

• you will want to run dual systems for a few months
• be sure both systems have same totals before dropping the paper

KEEP AN AUDIT TRAIL

• nothing more than a record of all your invoices and checks in numeric order
• the thing to remember is never skip numbers
• record voids in numeric order with other items, only denote as “voided” assures no gaps in your numerical sequence and leaves a proper trail

KEEP GOOD RECORDS

• bookkeeping is the glue that keeps your business together
• if your records aren’t in good shape, the business could fall apart
• a healthy business is monitored through its records on a regular basis
• you can find problems and correct them before it’s too late

MAINTAIN DAILY RECORDS

• if no time for daily bookkeeping, when will you process a month’s records?
• different people use different record-keeping systems
• what matters most is that you have a system and use it daily

PETTY CASH BOX

• get a metal cash box to hold currency and coins
• any money used is replaced by the receipt for that purchase
• cash plus receipts should remain at a constant dollar amount
• continue using the petty cash box until you run out of cash
• replenish the box by writing a check for “cash”, expensing all the receipts
• cash the check, put into the box, starting back with the same amount again

PRINTING INVOICES

• if use a many invoices each month, may want to have invoices preprinted
• this will look more professional and you will probably get paid quicker
• print invoices with perforation — tear off and return it with payment
• print your name and “remit to” address on both sides of the perforation

START AT THE END

• determine expense categories by looking at tax return you will file
• if you file a Schedule C, get a copy of a blank Schedule C
• write down all the categories that apply to your business
• include those categories when you set up your bookkeeping system

STORAGE BOXES FOR EACH NEW YEAR

• keep all your records for one year in one box
• bank statements, checks, financial statements, paid bills and other backup
• also include a copy of that year’s tax return
• label with the year and contents, then store it somewhere accessible

YOU ARE TAXED ON PROFITS

• many think they are taxed on all the money they take out of their business but sole proprietors taxed on the profits of the business, not the revenue
• estimated income tax payments should be based on profits

You can also get more learn more about running your own business from our blog about business advice. http://www.precisioncorpsvcs.com/blog/business-advice-2.