We’ve been getting a lot of small business clients who need help cleaning up their books. In most cases, they needed our help because they had been doing it themselves, and it showed. So my team and I brainstormed four tips for you to consider — and act on.
- Using personal accounts for business expenses and vice versa. It’s not uncommon for small business owners to commingle their personal money with the business’ money. It’s very tempting to say, “You know what? As long as the bills get paid, it doesn’t matter.” Even if they’re categorized properly, it’s really better to have two separate banking accounts for personal and business — and the same goes for credit cards (that’s where I see the most overlap).
- Closing up your books every month is important. In order to get accurate information from your numbers, your books have to be reconciled every month so that you can see where you went and where you need to go.
- Using a payroll service. I think a lot of small business owners think payroll services are expensive. They’re not wrong. However, with the way the tax laws change all the time, it’s really important to use a service that keeps on top of current events. A lot of small businesses find out the hard way that payroll services are worth every penny.
- Working with a CPA. It’s tempting to think that an online tax preparer will save you a lot of money, but they charge fees, too — and they’re not that different from an accountant’s fees. Many, many people have ended up backing out of their online tax services in favor of seeing a brick-and-mortar CPA. That way if their taxes contain any gray areas, they can get the answers from someone who knows local laws, too.
JHA can help small businesses that are coming to the realization that they need help. We can clean up your books, and hopefully establish a system to help you stay on top of them. What’s more, we have a network of vetted accountants that we’ve worked with for years for you to choose from. Contact us for more information.