09 Aug Bookkeeping for entrepreneurs – a three step plan
If you have been slacking on your bookkeeping this year, or are new in business and aren’t quite sure what you need to keep track of, this post might be the motivation you need to get your books in order. Below is a three-step plan you can use to get back on track.
1) Collect the information
The first step is where you get all your information together. You will need to collect all your receipts/expenses, invoices, tax documents, and put them all in one place.
If you already have everything in one place, for example, in a software program OR the dreaded box of documents, then you are already a step ahead of the rest and can move on to step two.
2) Record the information
For a sole proprietor, a basic excel spreadsheet can work wonderfully for this, but for a corporation or partnership you will require an accounting software. If you use a software program like Quickbooks or Freshbooks, and prefer to look at reports in excel, you can take information entered into the software and export an excel document when needed.
The recording part is the time-consuming part, but if you break it down into chunks and record a small amount of information every day, then this will go by faster than you think. As an entrepreneur, you should be taking time each day for this.
It is easier than you think. Record everything in an excel spreadsheet each day or utilize apps that allow you to input receipts and other information on the go.
Things you need to keep track of are:
- Bank statements
- Tax documents/payments
- Records of business structure/formation – Incorporated, etc.
Things you can deduct are:
- Home office expenses
- Vehicle expenses
- Accounting and legal fees
- Office rent
- Meals and entertainment
- Office Supplies
- Subscriptions and Computer Expenses
- Cell phone & Internet
- Capital Assets – Furniture, computers, equipment etc.
If you aren’t sure what to record, record it anyway, it’s better to have more information than not enough when tax time comes around. Our rule of thumb is if you can justify it as an expense that had to do with operating or providing your service then it can be written off.
3) Stay on top of the recording and file at tax time
If you follow the first two steps, then the last step is easy. Take all the recorded information and file it or send it off to your accountant.
However, if you haven’t followed the first two steps and it’s now crunch time, or you don’t want to do your bookkeeping yourself that’s where we come in. At Rochon & Associates, we can get you back on track, and your books organized quick. It’s all in the details. Here’s another post that might help!
We can also help with tax questions or look over everything to make sure you aren’t expensing something that down the road could get you audited. We practice pro-active bookkeeping so we can stop problems before they start. Need help, get in touch today!