How to create an accounting system for your business


You How do you get started with accounting So this is to make you feel more confident and stoked about running your business instead of overwhelmed and frustrated I think you should consider getting a separate bank account so that you can avoid commingling funds Commingling funds if you have your personal bank account and you’re putting your business through there What that does is it can create some exposure for instance if you were to be audited by the IRS And they wanted to check your numbers on your business return If you had a business account You could just give them that bank account and they would be able to pull all the information they need from those statements If it was commingled with a personal account Then you’d have to give them your personal bank statements and then they may come up with some other questions or need more information if you are responsible with credit cards and You’re getting a little sick of maybe using a debit card What I recommend is looking into getting a separate credit card solely for business again no commingling and what this does is is you can earn points or miles and when you have these you can use those for personal uses and Also, when you get one of these mileage cards or points cards, there’s normally an annual fee Well, it’s a business card so that can count as a business deduction the annual membership also, if you’re having big-ticket items on your credit card and You’re not able to pay off those balances right away because this card is not commingled with personal expenses You’re able to track which interest incurred on the credit card is related to your business So this is credit card has interest is this interest also a deduction on your tax return Next let’s talk about how you’re gonna track these things So for service industries with low volume low transactions I recommend spreadsheets to start with just to kind of figure out What works best for you and how often you’re using it it helps you figure out what bells and whistles you need if you are more of a Retail industry or you selling something I recommend looking into a software right away because you have inventory you have sales tax And it’s just better to have a record from the very beginning so that you can track these things going Last what records to keep and for how long so you want to keep your information for about 70 years? That’s how long the IRS audits you for as long as it’s not fraudulent if it’s fraudulent all bets are off they can Audit you for forever so what you want to do is when you’re keeping your records you want to keep all receipts that are over twenty five dollars and One way to do. This is by Getting an app that helps you take pictures of those receipts saves them to the cloud You can categorize them and whenever you need to access them you can

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