If you’re a new small business owner, chances are you’re so excited about jumping into your passion that you may not have considered the importance of proper accounting. Having all of your expenses in order can save you tons of money in tax deductions. Tracking your expenses is imperative, but many small business owners don’t anticipate the time and attention to detail that’s required to properly track expenses and maximize tax deductions. If you’re a small business owner, I recommend hiring an accountant around tax time and probably downloading an application to help you track expenses. However, even with the help of an accountant or a mobile application, there are still steps that every small business owner should take to make tracking expenses a less cumbersome process.
A great place to start is organization. You should keep track of all of your receipts and have a specific place where you’re keeping them in case you’re ever audited. If all of your receipts are in one organized place, it will also make it easier to calculate your business expenses when filing your taxes.
On the note of organization, it’s extremely important to keep personal and business expenses separate. It can be tempting to use your business credit card for grocery shopping and then to simply pay back the business at a later date; however, that will make accounting that much more difficult and time consuming. Most accountants will recommend keeping your personal and business accounts completely separate. You may sacrifice some immediate convenience, but you’ll save yourself countless time on accounting which will allow you to spend more time on your business.
Time is a paucity for many small business owners. There’s never enough time in the day and so as a result, accounting typically hits the backburner. It is paramount that every small business owner spends at least 15 minutes each week organizing their finances. It doesn’t take a ton of time if you stay on top of it. However, if you let your accounting slip, the work will pile up and you’ll eventually find yourself having to take hours out of your work week.
Lastly, it’s important to make sure that you’re keeping track of your money! Often times, there are so many other responsibilities surrounding a small business, that owners will actually forget to track payment. It’s important to understand payment schedules for certain customers and to make sure that deposits are made in a timely manner.
If you follow these tips, you’ll be in a much better situation when tax time comes around. Tracking your expenses will save you time and money and make life easier for you and your b. To learn more tips on streamlining the process for tracking your business expenses, please contact us at firstname.lastname@example.org