Small business bookkeeping tips are everywhere, but it’s hard to find that pearl of wisdom without paying too many clams. So, we’re here to give you some great advice you can use today…free for now!
First off, check out our series from the past couple of weeks: “Small Business Bookkeeping – Getting Started." All the tips on how to put your books in order in one place.
Plus, this week we’re posting tons of tips from tax professions and expert small business owners everywhere. Today’s small business bookkeeping tips come via Bonnie Lee, not your average tax expert. She’s been a certified IRS Enrolled Agent for over twenty years, but packs a mighty personality under that green visor! The author of Taxpertise: The Complete Book of Dirty Little Secrets and Tax Deductions for Small Business the IRS Doesn't Want You to Know, she also hosts a popular weekly radio show.
Here are Bonnie’s top six small business bookkeeping tips:
- DON’T MAKE YOUR BOOKS LOOK COOKED: Use an accounting program like QuickBooks to pay bills and reconcile your accounts. Not only will it save you time, but it could also save you from an audit! The IRS usually cuts short an audit when they see you keep a formal set of accounting records.
- CHECK PLEASE! Get computer checks for bill paying. When you write the checks and print them out of a program like QuickBooks, you save time. Why? Because you won't have to handwrite out each check and then enter this later into QuickBooks. It's all done in one action.
- TWO STUBS ARE BETTER THAN ONE: Use a one-check-per-page format. These come with two stubs. One stub goes with the check to the vendor. The other stub is stapled to the bill, so you have a record of the check # and date paid. This will save you the time and trouble of handwriting that information onto the vendor's bill.
- YOU’VE GOTTA GIVE ME CREDIT: Allocate just ONE credit card for strictly business. Set up the credit card account on the accounting program. Then, post the charges and payments and reconcile the balance every month like you would a checking account. Too many businesses lose deductions because they charge items for their business and fail to post the credit card charge. Another biggie is that they fail to deduct the credit card interest, which is a valid business expense.
- THE ENVELOPE PLEASE… Do not forget to collect and then post cash payments to your vendors. Set up a separate file folder or envelope where you can store the receipts until you have time to sit down and post them.
- KNOW THYSELF: Your computer accounting system should be kept so up-to-date that if you ever wonder what your current checking account balance is, you’ll find the most accurate information on YOUR accounting software, not online with your bank. After all, the bank doesn't know every check you’ve written or deposit you’ve made until it clears. But you know at the source.
Thanks for these helpful tips, Bonnie! If you’d like to consult Bonnie’s “taxpertise,” please see below:
IRS Enrolled Agent
Stay tuned for an action-packed week of great tips from the bean-counting pros! In the meantime, don’t forget to check out our recent series on small business bookkeeping!
And if you get stuck, don’t be afraid to hit the Panic Button. It’s the only help desk for small businesses online. No nonsense. No kidding.
Don’t forget to watch our training videos. Don’t know what a P&L is? Don’t know how to prevent bankruptcy? You can’t miss these videos, available to you 24/7. Go to our Learn section to watch as often as you like. Besides finding great small business bookkeeping tips, you’ll learn highly valuable tips you can’t afford NOT to watch!