Bookkeeping Rohnert Park

Important Accounting Tips

One of the most important parts of running a bookkeeping Rohnert Park business is to follow proper accounting procedures. Accounting for all your financial activities is a business priority and can help you to avoid financial problems down the road.

Bookkeeping Rohnert Park

Over one million businesses file for bankruptcy every year. Poor bookkeeping is one of the biggest reasons that they are insolvent. Rohnert Park businesses need to understand the importance of maintaining accurate financial records to prevent such problems from arising. You should follow the tips outlined below or read our bookkeeping articles for more information.

Bookkeeping Rohnert Park Business Tips 

In 2011, many Rohnert Park businesses faced the possibility of declaring bankruptcy. The Press Democrat claims that these problems primarily stemmed from the economic downturn, but poor bookkeeping certainly played a key role in many cases. Rohnert Park businesses need to make bookkeeping one of their top priorities to minimize these risks. Here are some important things that they will need to keep in mind.

Keep Track of Noncash Expenditures

Failing to properly track noncash transactions is one of the biggest mistakes that many businesses make. Neglecting to record accounts payable and accounts receivable can lead to a couple of serious problems:

·        You forget to send invoices to your customers, which will mean that you won’t be paid for your work.

·        You don’t keep track of your liabilities, so your actual equity will be much lower after you pay your bills.

Make sure that you record all accounts payable and accounts receivable transactions. You should make a journal entry every time that you complete work or receive an invoice. Make sure that you go over everything that you have done each week to see if you forgot to record anything.

Keep Track of Taxes

People don’t have to keep track of their taxes while working for someone else. They are taken out of their paycheck and they can always receive a refund if they file for deductions. Unfortunately, business owners have to always keep track of their tax liabilities. You will need to file quarterly self-employment taxes with the IRS, in addition to your business income tax at the end of the year. You can run into serious problems if you don’t have enough money on hand to pay your taxes.

Always record your tax liabilities whenever you receive a payment. Make sure that you set aside enough money to cover your tax payments when they are due.

Monitor Transactions Carefully

Recording errors are one of the most common bookkeeping mistakes business owners make. Unfortunately, they can also be some of the most serious. Always take the time to review all of your journal entries carefully and cross-reference them against your banking statements. Update any errors as soon as possible to make sure that your balance sheet and income statement are accurate.

Track Mundane Expenses

The IRS allows you to deduct mileage, a portion of some meals during business trips and a variety of other business expenses. Most business owners want to take advantage of every possible deduction, but often overlook these day-to-day transactions.

Make it a priority to record and deduct record every business expense. These small items will add up and can save you a lot of money when you file your taxes. However, you will probably forget about them if you don’t write them down immediately, so be as disciplined as possible.

Bookkeeping Rohnert Park Priorities

Bookkeeping Priorities

Maintaining proper accounting procedures is essential for the success of any bookkeeping Rohnert Park business. Accurate financial record-keeping is a top priority that can help you avoid potential financial problems in the future. With over a million businesses filing for bankruptcy annually, it's crucial for Rohnert Park businesses to understand the significance of maintaining accurate financial records to prevent such issues. Make sure to remember these four essential accounting tips:

1. Keep Track of Noncash Expenditures: One common mistake many businesses make is neglecting to properly track noncash transactions. Failing to record accounts payable and accounts receivable can lead to serious problems, such as forgetting to send invoices to customers or failing to account for liabilities. Make it a habit to record all accounts payable and accounts receivable transactions promptly. Regularly review your work and invoices to ensure nothing is overlooked.
2. Monitor and Track Taxes: Unlike employees who have their taxes automatically deducted from their paychecks, business owners must keep track of their tax liabilities. Alongside your annual business income tax, you will need to file quarterly self-employment taxes with the IRS. It is essential to record your tax liabilities each time you receive a payment and set aside enough funds to cover your tax payments when they are due. Failure to do so can result in significant problems down the line.
   
3. Carefully Monitor Transactions: Recording errors are common in bookkeeping and can have serious consequences. Take the time to review all journal entries carefully and cross-reference them against your banking statements. Correct any errors as soon as possible to ensure accurate balance sheets and income statements.
4. Track Mundane Expenses: It is crucial not to overlook smaller day-to-day business expenses that can be deducted for tax purposes. The IRS allows deductions for mileage, a portion of meals during business trips, and various other business expenses. Make it a priority to record and deduct every business expense. By keeping detailed records, you can take advantage of all possible deductions, potentially saving a significant amount of money when it's time to file your taxes.

Cash shortages are particularly common during a recession. The best way to minimize the risk is through careful bookkeeping. Rohnert Park businesses should recognize the importance of tracking their financial expenditures and contact us if you need assistance with your bookkeeping.

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