Consider Outsourced Bookkeeping for the New Year

Posted on December 22, 2015

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Small Business Bookkeeping Tips Include Outsourcing Your Bookkeeping

outsourced bookkeepingAs a small business owner, you may try to keep a lot of what’s going on in your business in your head. When the end of the year rolls around, you may be facing some challenging work as you try to pair documentation with the figures in your head for tax preparation. If this is a description that fits your approach to small business bookkeeping, it may be time to consider outsourced bookkeeping.

If you’re not finding time to fit in the following steps, consider whether outsourced bookkeeping might be a great gift to yourself for next year.

Plan for expenses. If you know that your company will need a major computer upgrade or other significant expense, plan ahead at least a year. Ideally, you should be planning for three to five years before a major expense arrives. Taking this step helps you to be honest about the seasonal ups and downs of your industry and prevent you from spending extra in other areas during the time when income is up, only to find that you don’t have the funds you need when a major expense surfaces.

Record your expenses. It may be helpful to use a business credit card that will categorize each type of spending you do. Another good practice is to use a log either on paper or in a mobile device to jot down your purchases, so that you don’t overstate your income. Not listing your expenses increases your income and you end up paying more in income taxes.

It’s important to carefully track your expenses, so that in case of an audit, you have documentation for all of your business spending. If you are forced to rely on estimates, you may even be setting yourself up for an audit, because the IRS is more likely to notice a round number. If you say that you traveled for 5,000 miles exactly, for instance, expect it to raise some eyebrows.

Keep deposit records. It’s important to keep accurate deposit records so that you don’t set yourself up to pay taxes on money that is not income. Keeping a deposit record allows you to double-check your income amounts, where data entry mistakes are easily made. If you receive money as part of a loan, for instance, you will want to make sure that the deposit is not recorded as income.

File quarterly taxes on time. Many small business owners find this step to be challenging. You must file your quarterly taxes, or you may be required to pay penalties and interest. Be sure to note the tax deadlines on your calendar, and set aside prep time so that you can get your payments in on time.

Monitor your accounts receivable. Late and unpaid bills are a problem for maintaining good cash flow. Many small business owners put off contacting customers that pay late, concerned about keeping the business. However, when you consider that you are providing an interest-free loan and it’s hurting your cash flow, you may get a different perspective.

Get reliable outsourced bookkeeping. If these processes seem too time-consuming or if you would like to receive guidance from an experienced accounting firm, consider outsourced bookkeeping. Many companies find it to be a cost-effective solution, because you remove the bookkeeping responsibilities from your to-do list, while avoiding paying a salary and benefits to a new employee.

Bert Doerhoff, CPA, has extensive experience providing outsourced bookkeeping, as well as advice and guidance to small business owners. The team at AccuBiz offers a range of bookkeeping services, from handling payroll to providing full bookkeeping and accounting service. Call us today to learn more.

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Posted in: Bookkeeping