Owning a small business is not easy! It is important that you keep a
good set of books. These books should be constantly and
contemporaneously updated to keep the IRS satisfied that you have not
just thrown together records at the end of the year.
Preparing taxes is a primary reason to keep a detailed set of books,
however this is not the ONLY reason. Every business owner wants to know
how profitable their business is and this means tracking income &
expenses. This also means a successful business owner will compare
current year to prior year results as well as compare how the business
is progressing to current industry standards. Reviewing this year’s
balance sheet accounts (cash, receivables, liabilities, etc.) to prior
years will help establish profit and sales goals.
There are more than 30 million small businesses in the US, 74 percent do
NOT employ full-time or part-time accounting help according to a June
2012 article published by AccountingToday.com. Consequently, many small
business owners are attempting to figure this out on their own without
the necessary background, taking away valuable time from running their
business.
Going at it alone might save money at first, but if you aren’t qualified
to do the work, you could end up landing in more trouble. Tasks such as
posting payroll properly, tracking credit card usage and reconciling
accounts can be tricky. Just knowing which account to post a particular
transaction isn’t always clear. A very clear comparison is just because
you own a hammer does not make you qualified to build a house.
Throwing data into QuickBooks or some other accounting software without
knowing the key elements of the bookkeeping process will create some
disastrous results. And those results will adversely affect your tax
return. This could result in additional tax liabilities as well as open
up other years for examination during an IRS audit.
Experts will tell you to seek out professional help in all areas of your
business in which you are not competent. In the past, small business
owners have had three options when it comes to business bookkeeping:
handle it themselves, utilize online bookkeeping programs or outsource
to a CPA. Small businesses embrace online tools for their lower dollar
cost, but without accounting expertise, spend valuable time trying to
figure out tasks in desperate need of a human being for guidance. CPAs,
on the other hand, are very expensive localized, and are not required to
keep up to date on tax issues, something that is all important to small
business owners.
So try going the cost effective route. Premiere Business Services knows
bookkeeping and most importantly studies tax law constantly! Our staff
works closely with small business owners to ensure they pay the least
amount of legal tax possible.
