Reasons to Ditch Your Shoebox Accounting System

2012-01-11T15:14:00.000-08:00

What is an Accounting System? An accountingsystem for your business is not as simple as a shoebox or file folder. These itemswill collect and organize your important business information but you need tolook at what the numbers are telling your business. An accounting system willtake your business beyond record keeping and provide important financialinformation.

Record keeping is considered by many entrepreneurs as oneof the “least important” part of operating a business (unless you are anaccountant). However, good record keeping is essential to your financialsurvival.

Make sure youmonitor the progress of your business: Good record keeping can show whether yourbusiness is improving, which items are selling and what changes are needed.Good record keeping can be the difference between failure and success.

Your tax returns: Recordsmust support the income, expenses and credits you report on your tax returns.Generally, these are the same records you use to monitor your business andprepare your financial statements. You must keep your business recordsavailable at all times for inspection by the IRS. If IRS examines any of yourtax returns, you may be asked to explain the items reported. A complete set ofrecords will speed up the examination and make theexperience much less stressful.

What kind of records should you keep? The typeof business you operate affects the type of records you need to keep for taxpurposes. You should set up your books using an accounting method that clearlyshows your income for your selected tax year. If you are in more than onebusiness, you should keep completely separate records for each business.

Bookkeeping Tips:

· Daily business records are the best

· Identify source of receipts

· Record expenses when they occur

· Keep complete records on all assets

Founded in 1998,ChilsonBusiness & Tax Services is proud to have successfully equippedentrepreneurs and businesses with what it takes to grow, and the ability totake their business where they dream to go.

Chilson Business & Tax Services focuses on assisting business owners by offering services in taxpreparation of all business entities and individuals, comprehensivebookkeeping, payroll, as well as QuickBooks support and training.

Bookkeeping and Tax Advice

Reasons to Ditch Your Shoebox Accounting System