Happy New Year, Business Owners!
We cannot overemphasize the importance of proper bookkeeping for your business.
If you have accurate and consistent bookkeeping, then your business will thrive and sustain itself in the long term. You will be able to manage your cash flow, meet your financial obligations, and plan for future investments.
Whether you are looking to budget, prepare for taxes, or have an accurate depiction of how your business is doing at any given time throughout the year, here are a handful of practices that need to be stopped as soon as possible.
Related Post: 5 Ways to Automate Your Bookkeeping
Not Keeping Receipts
As a business owner, you must verify your receipts, so make sure you hold onto them! Keep a record of all your receipts because you will need proof of how you’ve spent your funds throughout the year. Plus, a record of receipts will be invaluable if you’re audited at tax time.
Not Splitting Personal and Business Expenses
Business expenses should always be kept separate from your personal expenses. Your business expenses should refer to purchases that are made only by the business. That way, you can write off those costs and reduce the amount of tax owed to the government. Your business account will keep track of these expenses easily by being separated from your personal purchases.
Not Preparing for Tax Season Before April
Through a bookkeeping service, you will have consistent record-keeping to prepare for tax season. You will want to organize your tax paperwork, your income, and expenses. If you’re not prepared for tax season and specifically before April, you may run into financial problems for your business.
Not Having Backups
You should always have backups for your records, receipts, and bookkeeping paperwork. With a bookkeeping service, the accounting software will ensure everything is organized and saved along with generating reports and automatically reconciling accounts.
Doing It Yourself
While doing your own bookkeeping could be ideal for a small business that is just starting out, it is a time-consuming and ongoing task. Therefore, if you hire a third-party service to do your bookkeeping, you will save time and stress.
At Assemblage LLC, we offer Bookkeeping & Accounting Services to small and medium-sized businesses. Let us help kick off your new year the right way! Contact us today to get started.