Basics for Small Business Accounting

Posted on September 15, 2015

1


Are You Comfortable With These Key Components of Small Business Accounting?

small business accountingWhether you are just starting a new business or have been working on your own for years, you may still feel a bit on the edge when it comes to accounting. For many business owners, bookkeeping and small business accounting are areas they handle with reluctance. They fear making a mistake or not keeping adequate records for tax purposes.

Even if you have never had any exposure to small business accounting practices, by working with an expert, you can quickly become familiar with the basic tasks you need to complete to be ready for your tax return. Hiring an accounting specialist can also help ensure you are taking the necessary steps to protect your business, manage your finances and allow the IRS to evaluate your practices. Here are areas your accountant will tell you are important for keeping your business secure:

How are You Tracking Revenues and Expenses?: Tracking the money that is going in and out of your business can be done through the use of a journal, which records details about the money you receive and the expenses that are paid. You can also use a ledger, which records each transaction with debits and credits.

Got Cash?: You need to record your cash expenditures so that you are accurately tracking your expenses throughout the year. You can write reimbursable checks or keep a petty cash record that authenticates each cash purchase.

Line Items (a.k.a. Inventory Management): Keeping an accurate documentation of your inventory can prevent theft and the misplacement of inventory items. You need to keep records including the dates of purchases, identifying numbers for each item, the cost, dates sold and the sales price of the item when you sold it.

Accounts Receivable and Payable: You need a clear record of what you owe to your vendors and what your customers or clients owe to you. Capture all the data possible, including invoice numbers and dates, amounts and terms, as well as any amounts paid toward the balance.

Employees: It’s your responsibility to maintain the required forms for your employees, including a W-4 (Withholding Allowance Certification) for each member of your staff, in addition to an I-9 (Employment Eligibility Verification). You must also keep records on the employee’s withholdings, employer matching and unemployment and worker’s compensation amounts.

Hiring a consultant to advise you on small business accounting can help ensure that you are managing your records in a way that prepares your books for your tax return and improves your day-to-day operations.

At AccuBiz, Bert Doerhoff, CPA, regularly advises clients on small business accounting practices. Our services vary from giving guidance and advice to completely managing accounting and financial reporting. AccuBiz can provide a wide range of accounting and bookkeeping services. Give us a call today to set up an initial consultation … you’ll be one step closer to confidence toward your business accounting tasks.

Advertisements