Are You Doing What’s Right For Your Business?

Are you practicing sound fiscal management with your business? Most of us believe we are, but it is imperative that you maintain accurate and complete records for your business. Here are a few basic rules to guide you:
• Do not commingle funds! Ever. Period. Keep business money separate from personal money, open a business checking account and don’t mix the two.
• Include only business expenses, not personal expenses, in your business records.
• Keep ALL receipts for business purchases. If the business purpose is not clear from the receipt, include a brief explanation on the receipt. Don’t rely on your memory!
• Keep a record of all business income.
• Keep a record of all business expenses.
• If you have inventory…count it and track it!
• Create a company policy to make it easy for the company to consistently track and record reimbursable expenses. Failing to track reimbursable expenses can result in lost money as well as lost tax deductions.
• Track your mileage. Keep a record of where you went, the date, the mileage, and the purpose. In the event of an audit, detailed records will save you!

Now is the time to review your procedures and make the necessary changes. Don’t wait until it’s too late!

10 Responses to Are You Doing What’s Right For Your Business?

  • Very good advice. Especially about co-mingling your accounts. It can be easy to occasionally just pay for something out of your personal pocket but that gets messy as I found.

  • Well said. It is something I make sure all my clients understand but they don’t necessarily do

  • Glad to see you put not co-mingling the money as number one. That is usually the place that new biz owners get tripped up. It’s a sure-fire way to end up with legal problems. Timely post with all these new entrepreneurs running around! LOL

  • Sherri,

    GREAT Tips! I’m always stressing these to my clients and it’s amazing the excuses I hear about why they don’t save receipts…mix personal money w/ business money. I’ve gotten a few to put a box w/ my name on it and drop anything in it related to accounting….it has worked for a few but I still have others that won’t. ONE DAY!

    I’ve suggested this to those that need to keep track of mileage. Purchase a small pocket size calendar or whatever kind of calendar, keep it on you all the time…before you put the car in drive…write down the beginning mileage and before you open the door to leave write down that mileage.

    As for business furniture and electronics….I have created a nice excel spreadsheet for myself and will be creating one for another client for next week since this business hasn’t done this. Helps get that Personal Property Tax form done quick and easy!

    Didn’t mean to be wordy, but this is a GREAT post and hope those that read this do all these tips…will help YOU, your business and your CPA. Also consider hiring a bookkeeper to help you through the year if you need some assistance….they can get you organized and stay that way.

  • Excellent tips, Sherri!

    The one that resonates with me the most is “Don’t rely on your memory”! I believe that’s a behavior that gets a lot of folks in deep bandini. And I’ve found that I’m taking more and more time to write myself notes and it’s well worth the effort.

  • Sherri – wonderful advice to someone who groans when I hear the word business expenses etc.

    I am terribly guilty of most of the misdeamours you mention, but trying to get better. Have always kept receipts but a nightmare to organise at the end of the financial year.

    I did buy MYOB, but havent learnt how to use it yet!!! Each year I seem to be getting a little more organised, my accountant didnt groan at me too much this year, there might be hope for me yet

  • Every year that passes, I try to incorporate another useful tip for organizing tax papers. I am way beyond the shoebox now and it helps you to stay on track from the very start if you impliment what your accountant has to say, what you read from the experts and what you learn from other business persons. Take it all in to know what best works for you.

  • Well..I am a co-miingler…And I need to get you on board with my business fast! Because I’m not good at nor do I want to do what you have listed.

    Ha…I’ve come out of the closet. And there are so many business owners who just need to say…I deserve the help of a CFO!

  • All good tips Alyssa. This is a good checklist and reminder for self-employed business. These are all what I do daily in my business and actually have a check list from our CPA to be sure I don’t forget anything. It is also a good idea to talk to an expert about turning your business into a corporation or LLC. There are tax benefits that you might be missing out on.

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10950 N. La Canada #6204
Tucson, AZ 85737

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