Helpful Accounting Advice for Home-Based Businesses
Running a home-based business is, in many ways, the pinnacle of a modern career in that you get to be your own boss, set your own hours, and take the jobs that appeal to you (provided you have enough coming in to be choosy about it). Unfortunately, you also have to give up some of the conveniences provided by an office setting, including a team of accountants that manage all the bookkeeping. As a home-based business owner, you will find yourself wearing many hats, and accountant is just one of them. But if you’re like most people, you have no background at all in this field. So if you’ve suddenly found yourself tossed in the deep end and you’re sinking fast, here are just a few helpful tips to keep you afloat.
- Try accounting software. For those that don’t know the first thing about bookkeeping, the right software can make all the difference. One program that is widely accepted as the gold standard here is QuickBooks, mainly because it has everything a home-based business needs to operate efficiently, at least from an accounting point of view. You can not only enter data concerning income and expenses for your business accounts (keeping them separate from personal finances), but you can print checks directly, scan in copies of receipts, and basically compile everything you’ll need at tax time to ensure that all of your ducks are in a row. You can even link the program directly to accounts in order to draw data. It pretty much does it all.
- There’s an app for that. Whether you’re tired of saving paper receipts and you’d rather store them digitally in your phone or you’re looking for remote tax-prep assistance, there are a whole slew of apps out there devoted to providing on-the-go solutions for small business owners like yourself. If you happen to sell products or services you can even get the handy Square (hardware and software) for your iPhone in order to take credit card payments via your smartphone.
- Use what works. Okay, so there is a lot of technology out there that can help you manage your business more efficiently. But if you happen to prefer the old-school system of ledgers and receipts because you know how it works, there’s nothing wrong with using traditional accounting methods. In truth, digital formats could save you some time and space, but if you find it too frustrating you’re not going to stick with it, so use whatever strategies work for you.
- Track everything. If you’re not keeping track of your accounts, you could face major financial issues without even knowing it. Perhaps you’re missing out on income from clients that is well past due, or maybe you’ve let some expenses slip through the cracks. When you fail to stay current with your accounts your business is bound to suffer.
- Deduct, deduct, deduct! It doesn’t take a master of science in accounting to know that saving money is a good thing, especially when it comes to sending your hard-earned cash to the government. So find out exactly what you can write off for your business each year and then diligently save receipts so that you can claim all available deductions on your income tax returns.
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