Business bookkeeping basics are essential to a small business’s success in maintaining compliance and monitoring milestones. The tax professionals at Marshall Jones have put together this quick-start guide for small business bookkeeping to help you begin.
5 Bookkeeping Tips for Small Business Owners
Five key bookkeeping tips recommended by senior tax professionals can help your small business stay on track this year.
1. Open a Business Bank Account
It’s vital to have a distinct bank account and credit card for your business so that you have clear records when filing your taxes. Unless you’re a sole proprietor, you’ll need separate tax reports for home and business. Also, if the Internal Revenue Service (IRS) decides to audit your business, having mixed personal and business accounts can complicate the process further.
2. Expedite Your Accounts Payable Process
Bill.com is a legitimate and secure accounts payable and accounts receivable software that integrates with QuickBooks. It helps businesses integrate automated digital tools into their bill and invoice processes. It simplifies the process by making it easy to record bills and pay vendors via the Automated Clearing House (ACH), credit card, check and even international wire transfer.
3. Digitally Track Expenses
Managing multiple employees with company credit cards can become complex if receipts become lost, faded or damaged. Divvy is an online expense management and business budgeting software ideal for allotting spending money to your team. For example, an employee booking a hotel room for a business trip can receive the exact amount of cash they need with no more and no less. The employee simply snaps a photo of their receipt for digital recordkeeping.
4. Use Your Financials to Make Strategic Business Decisions
It’s key to take advantage of your financial records beyond tax time. Business owners should be familiar with a profit and loss statement to analyze their spending and costs, whether that’s year over year, month to month or even biweekly. It’s also helpful to learn financial analysis ratios like the receivable turnover, current, return on assets and debt to equity ratios — and much more.
5. Be Proactive About Your 1099 Tax Documents
A 1099 form is a tax document business owners use to report payments over $600 in a given year to independent contractors. The best policy is to take a proactive approach to prepare for 1099 forms by issuing a W9 to each vendor at the time of the transaction. Then, you’ll have their tax identification number and address on file to report on the 1099 form during tax season.
Get Professional Help With Small Business Bookkeeping Basics
Marshall Jones has been helping small businesses like yours with accounting and bookkeeping services in Atlanta for decades. To find out more about how we can help you with small business bookkeeping, contact us online and schedule an appointment today.