What Bookkeeping Rules Do I Need to Follow?

Top 4 Bookkeeping Rules to Follow

Bookkeeping is the back bone to every business. With that being said, bookkeeping can quickly become an incredibly hard task unless you follow these four simple rules.

1. Separate Business Bank Account

Have a separate bank account (and credit card, if applicable) specifically for your business. This is important even for you sole proprietors. Regardless of your business setup, this is vital.

If you are unable to get a credit card under your business name, make sure you dedicate one personal card strictly for business use only and use the payments to it as a reimbursement.

2. No Commingling

No personal expenses on the business bank or credit card account. In the rare occasion that you accidentally put a personal expense on the business account, record it as an owners draw or reimburse the business for it.

3. Keep Your Receipts

Store them in a file in your office or take a picture of them and save them in the cloud. This is vitally important in the event of an audit.

On each receipt write on it: who, what, where, when, why, and how much. Not only does this help backup the business purpose but it also reminds you in case you forget down the road.

4. Ditch the Cash

Cash is hard to track and prove. In the rare event cash is your only payment option, be sure to get a receipt so you can properly document the business expense.

Check out our episode on the Small Business Tax Savings Podcast regarding this topic!

JETRO Giving Back to the Community

Giving Back to the Community

Here are JETRO we take seriously the act of helping others and the community. Every year we make a donation to various charities and initiatives based on the amount of tax returns we file. This year we also included an additional amount for each Small Business Tax Savings Podcast review we received.

As a client of ours and reviewer of our Podcast you play a role in this donation. The amount we contribute is directly related to you partnering with us.

I just want to say, THANK YOU! Thank you for working with us and listening to our Podcast so we can make a donation on your behalf.

This year we are proud to announce our support for the following charities and initiatives:

1. Mobilize MKE

COVID-19 has caused a 35-50% spike in the number of people needing the services of food banks in Metro Milwaukee. This pandemic has also forced the cancellation of many food drives, multiplying the food crisis our neighbors are facing right now. These food pantries tell us they anticipate seeing even greater need in May. Donations made will service local food pantries.

Learn More Here

2. American Foundation for Suicide Prevention

A gift to the American Foundation for Suicide Prevention helps fund their mission to save lives and give hope to those affected by suicide. Each dollar brings us closer to a world without suicide.

Learn More Here

 

3. Make-A-Wish

The mission of the Make-A-Wish Foundation is to create life-changing wishes for children with critical illnesses. The children they serve are fighting for their lives, and their families are doing everything that they can to help them in their battles.

Learn More Here

 

4. National Multiple Sclerosis Society

Multiple sclerosis (MS) is an unpredictable disease of the central nervous system that disrupts the flow of information within the brain, and between the brain and body. The Society’s mission is: People affected by MS can live their best lives as we stop MS in its tracks, restore what has been lost and end MS forever.

Learn More Here

 

Again, we are able to make these donations on your behalf due to your partnership with us. We thank you for that and look to continue to help the communities around us and those that are less fortunate.

Five Useful Tips From Experts in Bookkeeping

Five Useful Tips From Experts in Bookkeeping

Not everyone loves bookkeeping. There are some people who would rather pour salt on a wound than update business records. Are you the type to throw all your records into a trash bag? If you are, then you know the struggles of trying to put everything together at the end of the fiscal year. Waiting until the last minute can be costly for your business. It can also lead to frustration, anxiety, and mistakes. If you own a business, accurate and up to date business records are a necessity.

Not to mention, it is a requirement, by law, that your business records are correct and completed promptly. As a result, your only choice is to get your records organized and keep them updated. The following are five useful tips from expert bookkeepers to give you that added push to keep your documents in good order.

Establish Bookkeeping Time

The most important tip for keeping your business records updated is to establish a time each week to work on your paperwork. When you stay on top of your bookkeeping, you will not become overwhelmed. Additionally, by keeping accurate and timely records, you will instantly know if any concerning issues are developing.

Accounting Software

Another tip is to purchase an accounting software program that works for your business. Not all software is created equal. Furthermore, the number of available products can be overwhelming. Therefore, you may want to consult a bookkeeping expert before proceeding.

Banking Accounts

As a business owner, you need to keep your business account separate from your personal account. You should keep them separate to prevent personal liability from your business transactions. If you don’t keep your accounts separate, you can become personally liable for business transactions that go wrong.

Taxes and Compliance Regulations

To keep yourself out of hot water, you must properly register your business. Moreover, if you have employees, you will need to register to withhold taxes on their behalf. If you are a sole proprietor with no employees, an accounting software program may be all you need. However, if you have a large operation or a complicated business structure, you should contact an expert accountant to discuss your bookkeeping needs.

Receipts

Finally, you must keep your receipts. All of them. If you want to deduct business expenses, you can only do so if you have your receipts on hand. Regarding paying employees wages, you will need to keep a record of those payroll transactions. Likewise, if you make money on sales of products, goods, or services, you must keep copies of your invoices. Thankfully, there are electronic options available. In the past, you might have needed to use that trash bag, but now you can upload those receipts into a software program.

In Conclusion

As a business owner, it is important to stay on top of your records. Not only is it a legal requirement, but it is also necessary to monitor business progress. By following the five tips from expert bookkeepers, you should avoid becoming overwhelmed with your bookkeeping. On the other hand, if you are struggling to keep up with the complexity of your business records, contact an expert accountant for your bookkeeping needs. Look no further than Jetro Tax to help solve your bookkeeping concerns. Call 844-327-9272 today!