subject: How Starting Your Own Business Can Be Easier When Following These Six Tips. [print this page] Many people think that owning their own business is a simple thing. Nothing can be further from the truth but their are fewer more rewarding experiences though. Record keeping is a very necessary thing to get right at the very beginning. Here are 6 suggestions to help you start right.
1. Keep Receipts For All Transactions Starting On The First Day. If you pay for everything with a check, debit card, or credit card this may not seem necessary. As a tax accountant I can assure you that it is. The IRS will disallow deductions if you do not have receipts to accompany your bank and credit card records.
2. No more cash. Resolve that you will not use cash to make business purchases. Cash is difficult to account for and difficult to document. When you pay for something with cash you can get a receipt but how do you prove that it was you who actually made the purchase?
3. Deposit All Your Income. It is very tempting to withhold cash from your business receipts but I advise you not to. Instead, be aggressive with your expenses. If you are in an industry where cash deals are common the IRS will look for evidence of cash deposits in your checking account. If they are absent you will have a lot of questions to answer.
4. I Recommend QuickBooks. There are many accounting software out there to use and a lot of them are not that useful. Most accountants are familiar with quickbooks which will make your year end tax preparation much easier. Consider taking a quickbooks class so that your tax return preparation fees will be lower.
5. Report Employee Earnings Timely. There are several services on the market that will be glad to do your Payroll Reports and process your employee checks. Shop around and get the best deal. This market has become more competitive which means there are some good deals out there for you.
6. Business Credit Card. Do some homework and get a good business credit card. There are many offers and so you can be choosy. It is important that you use this card exclusively for your business otherwise the IRS will disallow your interest and annual fees if it is used for personal. At year end you can take your statement to your accountant to prepare your taxes.
There are many other items to consider when starting your own business and I recommend you speak to an accountant as soon as possible. If you already have someone preparing your tax returns then you can start with them. Make sure they are familiar with hiring your spouse and children, medical reimbursement plans, business plans and entity structuring. Do not stay with an accountant who is not familiar with these because you cannot afford to.
