Five Bookkeeping Tips for Small Business

Bookkeeping Services in Houston

1. Plan for Major Expenses.

Be honest about the expenses that could be coming up in the next one to five years. Is it likely that you will need to upgrade your facilities? Is your office equipment on its last legs?

It is important to acknowledge the seasonal ups and downs of your business, and how they will affect your ability to spend during those times.

By making sure that you have forecasted for major upgrades, or peaks in staffing costs, you will avoid taking money out of the company in good months and finding yourself short in slow months.

2. Track Your Expenses.

Expenses can be hard to track, which means that you may be missing tax write-offs that you could have benefited from.

Business credit cards can be handy tools to make sure all expenses are kept together and tracked. As long as you keep up to date with your payments that is. Most providers have now adopted the service of categorizing your bill into types of expenses, meaning one less task for you to do.

To help prepare for audits, it is also useful for you to make notes in your calendar of the clients that you are meeting for each of those coffee dates, lunches and events. This will help substantiate your expenses for your tax records, should you be audited.

3. Record Deposits Correctly.

Whether it’s a pocket notebook and pencil, an Excel spreadsheet or financial software like Sage, make sure you keep track of what is being deposited into your business bank account.

You are likely to make a variety of deposits in your account throughout the year. From loans, to sales revenue, to cash infusions from your personal savings. If you cannot account for where each of the deposits have come from you’re leaving yourself open to paying taxes on money that isn’t income.

4. Set Aside Money for Taxes.

You know that you’re going to have to pay taxes and you know when. So systematically put money aside for it. Unpaid taxes can incur penalties and interest from the CRA, so make sure the money is there when you need it.

By putting money aside each month, or each time a contract is paid, it will come as less of a sting when they are due.

5. Keep an Eye on Your Invoices.

Late and unpaid bills can hurt your cash flow. Assign someone to track your billing. Then put a process in place for if a bill goes unpaid. That can be issuing a second invoice, making a phone call and even levying penalties such as extra fees at certain deadlines.

Make a plan for if clients are 30, 60 and 90 days late. Remember, every late payment is an interest-free loan that hurts your cash flow.

Source: smallbusinessbc

Alfredo Gaxiola has worked on numerous IRS problem cases and has successfully settled with the IRS to release liens on houses, bank accounts and wages and, if needed, setting a payment installment plan that is not burdensome for the client. He has conducted appeals before the U.S. Tax Court and obtained favorable resolutions in reducing the tax debt of his clients. Mr. Gaxiola served as Treasurer of Camara de Empresarios Latinos, one of the largest and strongest Hispanic organizations in the city of Houston. He has conducted financial and accounting seminars for the Houston Small Business Development Corporation, as well.

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