Accuracy, effectiveness and efficiency is our company's top accounting priority!
Accuracy, effectiveness and efficiency is our company's top accounting priority!
As soon as you start to think about your business, an accountant can help you take the next steps. We can discuss your business's organization, tax purposes and operations, along with target pricing and profit margins.
Get some impartial advice from an accountant before you consult the bank. A bank will want to see a strong business plan and organized records. Let us help you get ready for your business's next step!
Does your accountant return your calls? Do you feel comfortable asking them a question? Do you feel heard? With the right accountant, the answers should be a resounding "Yes!"
You can report your business’s profit by creating an income statement. Your small business income, or profit and loss, statement summarizes your business’s profits and losses during an accounting period.
The income statement is divided into three main sections:
An income statement is one of three main financial statements you can create to observe your business’s financial health, obtain outside financing, and make financial decisions. The other two financial statements include the small business balance sheet and cash flow statement.
Does your accountant return your calls? Do you feel comfortable asking them a question? Do you feel heard? With the right accountant, the answers should be a resounding "Yes!"
An audit is an examination of your business’s financial records. During an IRS audit, the IRS reviews your records and checks for inconsistencies in your books.
Receiving an audit doesn’t necessarily mean that you’ve done anything illegal. The IRS occasionally chooses a business at random to audit. And sometimes, the IRS audits a business if its small business tax returns look suspicious.
Some actions can trigger an IRS audit, such as:
Many business owners wonder if hiring a professional to handle their accounting is the right choice for them. Processes like applying for loans or filing for taxes become less daunting with an expert on your side. Some hire an outside accountant on retainer, while others decide to employ an in-house accountant full time. The choice depends on your business’s needs and resources. If you can’t afford to add an accountant to your payroll but need insight during tax season, you have the option to hire a short-term contractor.
When tax season arrives, you’ll want to be as prepared as possible. To make this easier, throughout the year, you should keep running tabs on business expenses you might claim on your tax return. For instance, if you’re running your business from home, you can claim deductions, like home-related expenses and repairs relating to your business. You should also keep all of your financial statements up to date to make filing taxes easier. Your business’s finances are crucial to its success, and as a business owner, it is up to you to educate yourself on the accounting process.
One of the first decisions you’ll make when starting up is your business structure. The structure you choose impacts taxes, liability, control, and how to pay yourself from your business. You can structure your business as a: Sole proprietorship Partnership Limited liability company (LLC) Corporation (C Corp or S Corp) Some business structures are more complicated to manage than others. Depending on how you structure your company, you may have significant filing and reporting requirements. Before selecting a business entity, lay out your business goals and consider the pros and cons of each.
You can use cash-basis, accrual, or modified cash-basis accounting to manage your books. Cash-basis accounting is the simplest way to manage your books. With cash-basis accounting, you only record transactions when you physically make or receive a payment. This is a single-entry accounting system, meaning you record each transaction once. With accrual accounting, you record money whenever a transaction takes place, even if you don’t physically give or receive money (like when you are billed or write an invoice). This is a double-entry accounting system, which means that you must record two entries for each transaction. Modified cash-basis accounting is a mixture of both cash-basis and accrual accounting. You can use modified cash basis if you want to use the same types of accounts as accrual but only record income and expenses when paid. Generally, you can choose the method you want to use, but the government requires some businesses to use accrual accounting (e.g., companies that make $5 million in annual gross sales).
When transactions take place, you must make sure that your books properly reflect the transaction. Think of debits and credits as two sides of a scale that must balance equally—if a debit increases an account, a credit must decrease the opposite account.
Debits increase asset and expense accounts. Debits decrease liability, equity, and revenue accounts. Credits do just the opposite.
Credits increase liability, equity, and revenue accounts. And, they decrease asset and expense accounts.
Debits and credits are the basis of double-entry bookkeeping, but they can be difficult to grasp, let alone memorize. Our handy chart should help clear up any remaining confusion around debits and credits.
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