Accounting Do’s and Don’ts for WAHMs
The fact is that pretty much anyone who works in any field of business knows that it’s important to make “doing the books” a top priority. Unfortunately, sometimes we don’t think about this fact until tax season rolls around.
However, if you ask any seasoned accountant or tax attorney, one thing that they will tell you is that when it comes to your business’s money, it is extremely important to be proactive rather than reactive. It will not only keep you in better graces with the government, but it will also give you peace of mind for all of the other months of the year.
When it comes to accounting dos and don’ts for Work-At-Home-Moms, what are some things to consider? We’re so glad that you asked:
Above all else, one of the best things to keep in mind is to learn the basics of accounting. Even if you contract an account to handle your books for you, keep in mind that there have been many people who have been taken advantage of all because they put their trust in someone who knew more than they did. So, whether it’s reading up online, purchasing some books or taking an accounting class, make sure you have a grasp of what is going on. Also, purchase some accounting software. It helps to keep things organized and it’s a convenient way for you to separate your expenses, taxes and other documents. Make sure to keep your business account separate from your personal one. This would include opening a checking account for your business and getting a credit card for it as well. If you are applying for a loan or grant, you may want to contract someone who specializes in those kinds of documents. The more polished your presentations are, the better. And finally, when it comes to tax season, you might want to consider filing quarterly. Sometimes it can be a bit overwhelming to get your annual receipts together and to try and mark your deductions when you’re doing them all at the last minute.
A “top priority” don’t would have to be “Don’t overspend.” There are many people who make the mistake of expecting to make a certain amount of profits and so they incur a lot of expenses, even before they have the money in hand. This is a surefire way to incur debt. Another “don’t” to keep in mind is don’t use money that is set aside for one thing for something else. For instance, if you pull out a certain amount of cash for taxes, but you need to purchase a new laptop, it’s actually wiser to save up money for the computer than to spend the money that was allotted for your taxes. Another tip would be to not settle for verbal agreements. Sometimes, when working with certain vendors, they would prefer to verbally commit to certain things. The challenge with that is if you don’t get what you ordered by the time that they said that you would, you don’t really have legitimate proof that the conversation ever took place. This is why it’s a good reason to make sure to get it all in writing. Speaking of vendors, another don’t is don’t pay an invoice before double-checking your records. In other words, don’t assume that just because someone sends you a bill that you have to pay the amount that is on it (this is another reason why having a paper trail is so important). And finally, don’t get into the habit of signing blank checks. You need to know that amounts that are going in and out of your business at all times. For more information on other accounting tips, visit contractoraccountants.com.
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