Reasons to Ditch Your Shoebox Accounting System

What is an Accounting System?    An accounting system for your business is not as simple as a shoebox or file folder. These items will collect and organize your important business information but you need to look at what the numbers are telling your business. An accounting system will take your business beyond record keeping and provide important financial information.

Record keeping is considered by many entrepreneurs as one of the “least important” part of operating a business (unless you are an accountant). However, good record keeping is essential to your financial survival.

Make sure you monitor the progress of your business:  Good record keeping can show whether your business is improving, which items are selling and what changes are needed. Good record keeping can be the difference between failure and success.

Your tax returns:  Records must support the income, expenses and credits you report on your tax returns. Generally, these are the same records you use to monitor your business and prepare your financial statements. You must keep your business records available at all times for inspection by the IRS.  If IRS examines any of your tax returns, you may be asked to explain the items reported. A complete set of records will speed up the examination and make the experience much less stressful.

What kind of records should you keep?  The type of business you operate affects the type of records you need to keep for tax purposes. You should set up your books using an accounting method that clearly shows your income for your selected tax year. If you are in more than one business, you should keep completely separate records for each business.

 Bookkeeping Tips:

·         Daily business records are the best

·         Identify source of receipts

·         Record expenses when they occur

·         Keep complete records on all assets

                                                                                                             

Founded in 1998, Chilson Business & Tax Services is proud to have successfully equipped entrepreneurs and businesses with what it takes to grow, and the ability to take their business where they dream to go.

Chilson Business & Tax Services focuses on assisting business owners by offering services in tax preparation of all business entities and individuals, comprehensive bookkeeping, payroll, as well as QuickBooks support and training.