Category Archives: Small Business Accounting

Five QuickBooks Small Business Hacks You Need to Know

Small business accounting and bookkeeping is a necessary part of the business. The software has made small business accounting and bookkeeping easier and more convenient. Affordably-priced software ranging from Wave Accounting to Xeno help business owners easily run billing, payroll, invoicing, and inventory.

There is a wide range of small business accounting software. As a small business owner who doesn’t even have time to spare for accounting and bookkeeping, how do you decide which software is best for your company? One potential software is Quickbooks Online. It’s a cloud-based accounting solution where records are kept online, protected by security, easily accessible, and regularly updated. *** 

If you are considering Quickbooks Online for your business or are using it now, here are some highlights of features that you should know:

  1. Connect your bank account(s) to it: Quickbooks Online allows you to connect your bank account once and it will then download all your bank transactions from the last 90 days. Additionally, it lets you connect multiple checking accounts, savings accounts, and credit cards. It will also auto-suggest categories and functions. The algorithms are quite amazing. 
  2. Don’t have to back up your data: As QuickBooks Online is all web-based, you keep all the data in the cloud. All information you store on QuickBooks Online is stored in the cloud. Data can be accessed at any time from your laptops and devices. 
  3. Invoice clients in CBO: Quickbooks Online can do all client invoicing. Gone are paper billing and sealing envelopes. It lets you design invoices with your business brand on it. Invoices can be automated and it will mark invoices that have been paid. Recurring invoices can be sent out, too, thorough the automated invoicing function. 
  4. User Interface Is Intuitive: QuickBooks was created for the non-savvy, non-accountant business owner or employee. So, it is much easier to use based on the easy interface. It has a brief and easily-understood tutorial. This five-minute guide shows users how to import and categorize transactions. A menu shows how to navigate between the Banking, Reports, Sales and Expenses functions. Reviewers consistently complement the design as it is not all pushed into a small space.
  5. Many users can use it at the same time: Quickbooks Online has several packages which allows multiple users to have full access and use of the data. Additionally, if you want to save money, the username and password can be shared with other employees. However, if there is restricted data, such as payroll, it can be protected and accessed only approved individuals. 

These are just a few of the features available with Quickbooks Online. As with any small business accounting software you choose, the software might be designed to be simple and easy to navigate but somehow a wrench gets thrown into the books!

If this happens, the staff at A.K. Burton, PC is here to help. We specialize in small business tax preparation and provide a wide range of services to our clients including getting that wrench out of your books. If you need help straightening out your QuickBooks online, please call us at (301) 365-1974 for a consultation. Our office is open! We serve Bethesda, Rockville, and Montgomery County. MD area.

*** For more information about Quickbooks Online, visit their website.

Business Tax Preparation Tips: Why You Should Do Estimated Tax Payments Now!

By the time you read this, Tax Day 2021 is over. Millions of Americans have filed their tax returns to the Internal Revenue Service and to the state or to the District where they live. 

For many people, Tax Day meant they wrote large checks or filed extensions so they could pay off the 2020 tax bill. It was a very difficult and stressful day for millions of filers. 

You can save yourself a lot of pain, stress and fees by doing one thing differently: Make estimated tax payments as soon as possible! 

Estimated Tax Payments *** are for those whose federal and/or state withholding is under withheld during the year. Estimated tax payments are used to fill in the gap in withholding and proactively pay your predicted tax liability for the current year as you earn the money. Paying quarterly estimated payments is a strategy to avoid having to pay a huge bill on tax day along with penalty and interest that may be charged by the IRS or the state. Payments are made incrementally, on the following quarterly tax dates:

Payment Period                         Due Date 

January 1 to March 31 April 15
 April 1 to May 31  June 15
 June 1 to Aug. 31  Sept. 15
September 1 to December 31  Jan. 15 of the following year
2021 Estimated Tax Payments Schedule

Traditionally estimated payments are made quarterly. Had a big tax bill this year and want to avoid it next year with similar earnings predicted for this year? Have your accountant or bookkeeper calculate estimated payments. At A.K. Burton PC, we calculate estimated payments for our clients regularly. Has your income changed significantly this year? Contact your accountant and have them recalculate your estimates.

How do you pay your estimated payments? Methods of payment include scheduling an online payment or by check. If you’re interested in paying your estimated payments online: find the correct links by going to your state’s department of taxation’s website or to the IRS website and have them withdraw the funds.  Don’t have the full amount to send in that your accountant recommended? Send in the amount you can. 

A.K. Burton, PC, can do all your income tax preparation. We have experienced staff who can prepare and file your tax return and represent you before the IRS. Call us at (301) 365-1974 for a consultation. Our office is open. At this time we are not providing in-person services because of the pandemic. We serve the Bethesda, Rockville, and Montgomery County, MD area.

*** You can find out more about Estimated Tax Payments at the IRS website.   

Small Business Accounting Trends for 2021

Thinking about improving your small business? How about improving your small business accounting? Here are some accounting trends for small businesses to consider: 

  1. Data Analytics: Small business accountants can track data and perform an analysis. These insights into data help business owners make better financial decisions and improve resource efficiency. 
  2. Cloud-based Accounting: Businesses can access their bookkeeping records anytime and anywhere on the cloud. The cloud system saves business time and effort as they can track all their sales, inventory, and expenses in real-time. 
  3. Outsourcing small business accounting needs: Just because the technology is out there, does not mean you have to use it or feel comfortable with it. Many small businesses are outsourcing to accounting firms, either in their location or even in another state. This option lets the business focus more on its daily operations. A.K. Burton, PC specializes in tax preparation for small businesses and their owners. 
  4. Using Social Media: Social media channels are essential in building brand loyalty, promoting accounting services and products, engaging with the public and clients, and educating followers on accounting procedures and trends. Social media management also sends visitors to the website which increases traffic and recruits new customers. Facebook, LinkedIn, and Instagram have become an invaluable part of marketing for 2021. 
  5. Website Content Management: Blogs, both written and video, are ways to educate and sell to the public. This also increases traffic to the website and is considered quality content by the major search engines. Publishing monthly blogs should be a staple of any marketing strategy.

Hopefully, these trends have inspired you to reconsider your small business accounting. A.K. Burton, PC, has experienced accountants who can assist you with your small business accounting. We specialize in tax preparation for small businesses and their owners. Call us at (301) 365-1974 or email info@cpa-maryland.com. A.K. Burton, PC serves the Bethesda, Rockville, and Montgomery County areas.

Five Tax-Planning Strategies to Try Before 12/31/2020

It’s November. What comes to mind when you hear November? Holidays and turkey time? At my work, we are thinking about something a little different…tax planning! The tax year 2020 is drawing to a close. That means there’s still a good month left for tax planning. If you own a business, you still have time to make some crucial, time-saving, and money-saving tax planning decisions. The tax year 2020 has held some significant challenges navigating the COVID-19 pandemic. Tax planning is important; especially if your business has been significantly impacted by the pandemic. Contact your tax preparer to discuss some tax planning strategies. Next thing you know, the first quarter 2021 will be happening and it will be time to put that planning to good use.

Take the time to meet with your CPA and go over your books. Here are some tax-planning ideas to get the ball rolling:

  1. Claim quick disaster loss refunds. Businesses can claim specific losses attributable to a disaster on a prior-year tax return. This is meant to provide quicker refunds. The Trump COVID-19 disaster declaration designated all 50 states, the District of Columbia, and five territories as disaster areas. Almost every U.S. business is in the covered disaster area thus making it eligible for refunds, depending on the losses. A business may claim a COVID-19 related disaster loss occurring in 2020 on a 2019 amended return for a quicker refund. It may affect losses coming from many different circumstances, such as loss of inventory or supplies or office, plant, or store closures. The loss must actually be attributable to or caused by COVID-19.
  2. Payroll tax deductions. The CARES Act lets employers defer paying their 6.2% share of Social Security taxes for the rest of 2020. Half of it is due by Dec. 31, 2021. The second half is due by Dec. 31, 2022. Payroll taxes cannot be deducted until their share is paid. Some taxpayers may pay the taxes as late as 8½ months into 2021 but still, claim a deduction for 2020.
  3. Use above-the-line charitable deduction. In the past, there was no tax benefit for giving to charity unless you itemized deductions. The CARES Act, however, created an above-the-line deduction of up to $300 for cash contributions from taxpayers who don’t itemize. In order to take advantage of this provision, donate by 12/31/2020. 
  4. Make up a tax shortfall with increased withholding. COVID-19 caused cash-flow issues for many businesses this year. Your withholding and estimated taxes should align with what you actually expect to pay while you correct the cash flow issue. If you are in danger of being penalized for underpaying taxes, make it up through increased withholding on your salary or bonuses.
  5. Use low-interest rates and generous exemptions. Interest rates this year are historically low. Plus, lifetime gift and estate tax exemptions can still be utilized. COVID-19 is depressing many asset values but you can still use estate-planning strategies. The present gift and estate tax exemptions are scheduled to expire in a few years. 
  6. Claim AMT refunds. The Tax Cuts and Jobs Act (TCJA) repealed the corporate alternative minimum tax (AMT). Now, corporations may claim all their unused AMT credits in the tax years beginning in 2018, 2019, 2020, and 2021. The Coronavirus Aid, Relief, and Economic Security (CARES) Act allows corporations to claim credits in either 2018 or 2019. Companies have several options to file for quick refunds. They can file a tentative refund claim on Form 1139. It must be filed on 12/31/2020 to claim an AMT credit.

There are a number of tax planning strategies that may be in the best interest of your business. In order to customize your tax planning strategy, we need to meet with you, analyze the data, and discuss. The tax planning process takes some time, so don’t wait until the last minute. Contact us today and consult one of our experienced tax advisors. 

A.K. Burton, PC, can assist small business clients with their taxes. We are familiar with the CARES Act and TCJA and can advise our clients on being proactive in their tax planning by the end of the year. Call us at (301) 365-1974 for a consultation. Our office is open! We serve Bethesda, Rockville, and Montgomery County. MD area.

*** You can find more information about TCJA at the IRS website

Small Business Tax Preparation: The Five Biggest Mistakes People Make

We have finally reached the fourth quarter of 2020.

2020 has been a year like no other, especially for small businesses. Tax deadline changes, COVID restrictions, added tax laws…it’s hard to keep up with it all.

AK Burton, PC specializes in helping our small business clients keep up with their taxes. Is October the time to think about taxes? Yes. Now is the time to get in touch with your CPA if you have had an abnormal business year and plan how to close out 2020.

As you and your accountant begin the tax taking a look at your small business taxes, keep in mind these five biggest mistakes people make in small business tax preparation:

  1. Misclassifying employees and independent contractors: Misidentifying a person as a contractor and not as an employee will lead to penalties and interest for non-payment of the employer share of employment taxes. The business must give every employee a W-2, and every contractor that was paid more than $600 gets a Form 1099-Misc.  
  1. Failure to pay “reasonable wages” to shareholders of an S-Corporation: The IRS states that for the 1120S income tax return that “Distributions and other payments by an S corporation to a corporate officer must be treated as wages to the extent the amounts are reasonable compensation for services rendered to the corporation.” The shareholder plays an active, day-to-day role in the business, so, they are an employee and have to be paid a market-based salary for that position.
  1. Missing valid deductions or overstating business expenses: If your business expenses exceed its income, you may get the unwanted attention of the IRS. All of your business expenses need to be considered. IRS rules are quite strict on home office expenses as whatever is used for business should not be used for any other purposes than business. The IRS is “generous” when it comes to some Schedule C expenses. Be sure to use the depreciation schedule that the IRS has for deducting business equipment, business vehicles, and buildings. ***
  1. Improperly mixing business and personal expenses: This is one of the most common business tax filing mistakes of all. Many business clients co-mingle their personal and business banking accounts. “Co-mingling” your personal and business checking accounts makes it hard to distinguish which expenses are tax-deductible. Please keep personal income and expenses out of business bank accounts.
  1. Failure to plan: Tax laws can be complex. Most business owners are too busy running their company to understand all of the tax law nuances. A CPA or tax attorney is experienced in these matters and can help the business properly manage their accounting and business processes. Tax advice can help businesses take advantage of their resources and avoid unwanted consequences that may unknowingly occur due to the complexity of the tax laws. If you are about to incur an unusual financial transaction such as a large asset purchase or sale that is not an ordinary part of your business activity, contact your CPA to discuss the tax implications of the transaction. There may be unforeseen and unexpected tax consequences.  

At A.K. Burton, PC, our specialty is assisting small business clients with their taxes. We are familiar with the tax laws and can advise our clients on being proactive in their tax planning for now and the future. Call us at (301) 365-1974 for a consultation. Our office is open! We serve Bethesda, Rockville, and Montgomery County. MD area.

*** You can find the IRS Depreciation Form 4562 here.

How to Use QuickBooks Services for Your Small Business Accounting

In these days of COVID, (I’ll be so glad when I won’t have to use that term anymore!) it’s good practice for small business owners to do much of their accounting online using software designed specifically for them. It saves money, time, and protects them from exposure to others. 

QuickBooks *** is a popular and economical program for business owners and accountants. Its features, functionality, and ease of use are all strong reasons to use this program. 

If you are considering QuickBooks as a tool to manage your books, here are some ways you can use it:

  1. Invoice customers: QuickBooks lets you invoice your customers to decrease accounts receivable and increase cash flow.
  2. Manage bills and accounts payable: Keep updated on your bills to your vendors and suppliers by using the enter bills and pay bills function. Keeping your vendors and suppliers happy is important as well.  You don’t want to fall behind on your outstanding bills with vendors. You just enter the payment and due date. No longer do you have to write and print checks. QuickBooks online pay function is easy and efficient. Plus, it saves you money from having to buy checks.    
  3. Employee time management: Enter the employee time data on the home screen. It can be a one-time event or a weekly payroll period. QuickBooks measures employee productivity and job costing, if applicable.
  4. Payroll management: QuickBooks lets you process payroll directly or you can integrate a third party for it. You will record your outsourced payroll in QuickBooks. You can also import your payroll data from QuickBooks to the accounting firm. 
  5. Memorized transactions: You should use QuickBooks memorized transactions to automatically enter transactions that occur on a regular and predictable basis.  This can include invoices, bills, journal entries, and payments.  The idea is to boost efficiency and have certain items be entered automatically into QuickBooks.  One example of good use of a memorized transaction is a bill that you have set up to be automatically deducted from your checking account like the monthly internet payment.  By memorizing a check you can have the payment automatically post to your checking account a certain number of days in advance. 
  6. Online banking: Major banks are now integrated into the QuickBooks software. So, you can set up your business to do all its online banking through it. 
  7. Printed checks: If you do need to print checks, you can keep cash flow analysis updated. Then you can print from it. It is extremely efficient!
  8. Journal entries: You may need to correct bookkeeping issues and create year-end entries per with your CPA so it matches your tax return. These detailed entries may be necessary when you file your tax return. 
  9. Online payments: The QuickBooks Intuit Payment Network gives your customer a convenient way to pay your invoices online. 
  10. Financial reporting: QuickBooks allows you to run reports to help get a snapshot of where your small business is at the moment. Your bookkeeping will be enhanced by its financial reporting.

If you are not using QuickBooks services, you may want to consider it. For the reasons listed above it may benefit your business to look into purchasing and using a software such as QuickBooks.

At A.K. Burton, PC, we help our small business clients with their taxes. We are familiar with QuickBooks as it is one of the many software that we use to serve our clients. Call us at (301) 365-1974 for a consultation. Our office is open! We serve the Bethesda, Rockville, and Montgomery County. MD area.

*** For more about QuickBooks Small Business Services, click here.  

Financial Advisor: Small Business Tax Planning for Fall 2019

Fall is only weeks away. Summer is basically done

So, what does that mean for you, the small business owner? Well, you can begin making moves that will positively affect your 2019 IRS tax bill. The IRS has made many changes recently that many small business owners may not be aware of or use.  

Here are some ways you can start your small business tax planning that most financial advisors would endorse as we move into the fall season:

  1. Start your 401 (k) now: In 2019, small business owners can deduct up to $51,000 with matching. In other words, you can use $18,000 as a deferral before matching and $5,500 for employees 50 years and older. (Check with your payroll officer or business accountant before taking this measure.)
  2. Buy a business vehicle: Small businesses can purchase a truck or any vehicle weighing 6,000 pounds or more. This year, businesses can deduct up to $25,000 depending on the business use percentage and cost of the vehicle. 
  3. Convert your IRA to a Roth IRA: Your traditional IRA is not giving you all the benefits. Instead, convert your IRA to Roth. You will pay taxes at a lower rate and avoid paying takes on future withdrawals. Check with your accountant or financial advisor before changing over. You must do it by December 31, 2019. 
  4. Add your children and spouse to the payroll: A forgotten-sometimes abused-way of saving money is by bringing your spouse and children onto the payroll for doing real work for the business. Pay them through a sole-proprietorship or single-member LLC. If children are under 18 years old, the business is not required to withhold FICA or payroll taxes. Additionally, the child can use a standard deduction of $6,300 against any income you pay, as its earned income and so no income taxes! However, if it’s an S-/C-corporation, the IRS requires that you withhold FICA from all employees on the payroll. (Again, check with your small business accountant for details and guidelines.) Office cleaning, filing, shredding, driving to errands, etc., are jobs both children and spouse can do for you. 
  5. Set your payroll amount: By December 31, all S-Corporation owners or newly elected LLC S-Corps must complete their payroll. The fourth quarter is coming and it may draw an IRS audit but you may want to lower it or increase it based on the net business income. 
  6. Close on the rental property: Your rental property may be costing you write-offs now as laws have changed. Check with your accountant to see if the real estate professional classification has changed. 
  7. Make your LLC an S-election: Done in December, if you’ve paid a high amount of self-employment tax and had an LLC, you can elect to be taxed as an S-corporation, retroactively, to January 1, 2019. The application is easy and does not cost a lot. Be sure to do the payroll and take some payroll for yourself. 

There are a number of other tax strategy steps you can take. Please consult an experienced small business tax accountant before you do. 

A.K. Burton, PC, has experienced small business financial advisors who can assist you and represent you before the IRS and even do your payroll. Call us at (301) 365-1974 or email info@cpa-maryland.com. A.K. Burton, PC serves the Bethesda, Rockville, and Montgomery County areas.

Ask a Financial Advisor: Should You Do Your Startup Business Now?

We have all seen the headlines: “Best economy in fifty years!” 

We’ve also seen the story about the person who lost their job and said they weren’t going to work for “the man” anymore. So, they started their own business and now are multi-millionaires! 

Great economy. 

Wealthy entrepreneur. 

There are plenty of success stories. There are also plenty of failures. Starting a business is a risky venture which can make or break an individual and their investors. It should be done carefully and with research. 

Before you hand in your two-week notice, pack your office and take out a loan to start your new business, it is important, from a financial advisor’s view, to consider these factors:

  1. Starting a new business by yourself is almost impossible: You will not be able to do it all on your own. You may need a business coach to help you prepare. You may need the advice of a financial advisor to set up a budget. You may need an accountant to do your bookkeeping. You may need an admin assistant to take phone calls and do your records. You may also need to create a team of subcontractors. In other words: You will need a support system. 
  2. Start-up is a way to not make money for a while (i.e. years): If you had planned to replace your income during your startup time period, you will be disappointed. Many new entrepreneurs go without paying themselves for years, sometimes five years or more until the business begins to pay. Most income goes into paying for rent, utilities, equipment, Wifi, fees, and payroll. You may need to keep your present job just to pay the bills or depend on your spouse, family or investors to pay your personal expenses. It may pay off eventually but, in the meantime, you may live a Spartan lifestyle. 
  3. Take care of your mental and physical health: We’ve heard the horror stories of doing 20-hour workdays and working seven days a week. That cannot last long. The body and mind will shut down. A new startup will require long hours but doing a ridiculous schedule will only burn the new entrepreneur out. Share your difficult times with your spouse, family, church/temple or networking group. Get 6-8 hours of regular sleep, eat three meals a day, exercise fifteen minutes a day, reduce alcohol consumption and dependence on drugs to keep you going. Finally, practice humility. You cannot work all day, every day. You won’t survive. Put your mental and physical health first. 
  4. Be comfortable with change: Life is all about adapting to change and leading a startup can be quite chaotic. Be ready to accept changes, some big (moving the business to a new storefront) and some small (changing copiers). Change may also signify success. Embrace it and roll with it. Most changes are not negative, even if they take a while to adapt. 
  5. No job is too low or too dirty: Running your own business, at first, may mean cleaning your bathroom, emptying your trash, mopping the floor, dusting the desk and doing the inventory. You are part of a team and that means not being afraid to get your hands dirty. 
  6. Keep a tight watch on your finances: As a financial advisor, I have seen startups that have been disciplined in their spending and others that have become debt-ridden as expenses got out of control. Either hire an experienced bookkeeper to watch every expense or have someone on the company keep tabs on expenses. Most business failures come from out of control spending that is not paid for by income. Debt is part of doing a startup but it can send businesses crashing to the ground, too, never to return. Bottom line: watch every penny and be disciplined in spending.   

After reading the above, you may still be asking: Should I start my own business? You have to make that decision on your own after getting seasoned and smart advice. If you can handle all that we talked about, you may be ready to start your own business. 

A.K. Burton, PC, works with small businesses and entrepreneurs every day. Our experienced legal and financial advisors can help you with planning, budgeting, and payroll.  Contact our friendly and experienced staff at (301) 365-1974 or email info@cpa-maryland.com. A.K. Burton, PC serves the Bethesda, Rockville, and Montgomery County areas. 

How QuickBooks Can Change Your Small Business Accounting

Online accounting has been around awhile. In fact, most accounting is done online now in a cryptic, password-protected program.  

 One of the most popular programs is Quickbooks. It is used by millions of subscribers for business, small and big. Quickbooks accounting programs have led the way in innovative bookkeeping and easy functionality. 

 If you are feeling overwhelmed trying to organize your books, consider using Quickbooks. Here are some ways Quickbooks can change your small business accounting:

1.    Invoicing: You can create and send your own invoices. You can now increase your cash flow and decrease your accounts receivable.

2.    Cash flow control: By keeping your Quickbooks file updated, you can use it then to manage your cash flow. You have to enter your financial transactions regularly and do daily reconciliations. It is done by sorting the Quickbooks bank accounts by sing cleared status.

3.    Manage employee time: On the home screen, employee time can be entered (either a single time event or a weekly timesheet). This tracking system measures employee productivity. 

4.     Memorized Transactions: Regular transactions can be automatically entered on a regular basis. Quickbooks memorized transactions may include invoices, bills, journal entries, and payments.  Thus, your accounting should be much more efficient. 

5.    Accept Online Payments – The “Intuit payment network services” allows customers to pay your invoices online. It costs only $0.50 per transaction with no percentage of the invoice being charged as a fee.  

6.    Payroll Management – Payroll can be processed directly in QuickBooks. Your outsourced payroll can be recorded directly in Quickbooks. All payroll companies can import your outsourced payroll data into QuickBooks.  

7.    Financial Reporting: Small business financial reporting is a critical part of your small business bookkeeping.  

8.    Email Invoices and Statements – All of your small business invoices and statements can be emailed directly from Quickbooks. It reduces the time it takes for your customers to pay you. 

9.    Accounting questions listed: There may be some transactions that you may not know how to handle and could keep you from reconciling and closing out your financials.  The “Quickbooks Ask My Accountant” code on your chart of accounts lets you enter the transaction in question then reconcile all of them while keeping your questions organized in one spot.  

Quickbooks can become an essential part of your small business accounting and bookkeeping. The software can help organize your business and centralize multiple business functions. However, just understanding where to begin with Quickbooks can seem impossible. At A.K. Burton, PC we use QuickBooks as a tool to help our small business clients manage their businesses. If you don’t know where to begin with your small business accounting, we are here to help. We specialize in small business accounting services. 

A.K. Burton, PC, has Quickbooks accountants experts on staff who can help you set up and use this exciting accounting program for your business. Contact our friendly and experienced staff at (301) 365-1974 or email info@cpa-maryland.com. A.K. Burton, PC serves the Bethesda, Rockville, and Montgomery County areas.

Planning for the Fall: Small Business Accounting Practices to Keep You Ahead of the Game

Summer is half over. The days are getting shorter.

Parents are preparing to send their children back to school next month.

This season, as we know it, is coming to a close. Pretty soon, we are all back from vacation, kids have returned to school, Labor Day is over and the next holiday is Thanksgiving, months from now.

The end of summer can be a drag. two men sitting across from one another working on laptops

However, as a business owner, you can do some things now during these low-key summer days, that will benefit you, your employees, your clients and other stakeholders (i.e. The IRS). So, take some time now and do these small business accounting practices that will keep you ahead of the game before the cooler days of fall hit:

  1. Business and Personal bank accounts need to be separated: Much of the confusion and stress business owners have in accounting has to do with bank accounts. If you are using your business account also as your personal bank account, you will run into some serious tax issues that could take many hours and days to untangle when tax time comes around. So, create separate bank accounts for each and save yourself lots of confusion and billable hours with your accountant (or worse, an IRS auditor).
  2. Record bank deposits accurately: Make sure all loans, sales, refunds and other receipts are recorded accurately. You may have to set up a meeting with the small business account specialist at your bank to make sure you are doing it correctly. They can go through each monthly statement with you. Your accountant can also advise you on the best accounting program to use.
  3. Record all business expenses: During a typical business year, your company could be spending thousands (or more) in expenses. From inventory to travel to fuel to rent, there are many business expenses that need to be recorded accurately and backed up with receipts. Make sure you and your administrator(s) are tracking all expenses. Many business expenses are tax-deductible, so failing to record them could be costly.
  4. Bring in an outside accounting expert: Accounting and bookkeeping can be agonizing and time-consuming. So, perhaps, once a month or once a quarter, hire an accountant to take a few hours and review the books. They can make recommendations and corrections, keeping your company on track.
  5. Set aside time for accounting: It all will pile up very quickly and become a monster if you don’t watch out. So, set a day and time each week or month to record and file receipts or visit the bank.
  6. Labor expense tracking: This is the largest expense for most companies. Keep track of hours paid, overtime, bonuses and other expenses to make sure you are paying your employees accurately.
  7. Inventory control: You may have a warehouse full of inventory. If so, take  time to record all of the items in your inventory, including items that are being returned to the manufacturer/supplier.
  8. Meet with your administrator monthly: If your company has a staff member dedicated to accounting, meet with them monthly or regularly to review statements. It may be quite boring to do, but it keeps you and your admin on top of the bottom line: expenses and income. After all, that is why you are in business!

Poor accounting practices have damaged or sunk many businesses. Just doing even a few of these tasks will keep you and your business on track and successful.

A.K. Burton, PC, which serves the Washington,D.C. and Bethesda, Md area, has experienced and licensed individual financial advisers who can help you sort through your bookkeeping. Contact us at (301) 365-1974 for more information or email us at info@cpa-maryland.com.