Did you know that if you have fixed assets, those fixed assets can be depreciated?
this would be important to know because it literally means more cash in your pocket. But in order for that to happen you have to know what you bought, when you bought it, how much you paid for it, and if you sold it or threw it away, when that happened.
there’s a fixed asset list and quickbooks so you should be able to run a simple report there and see if you’re fixed assets are in there. If not send A list to your accountant or bookkeeper and asked them to make the appropriate entries in your chart of accounts.
fixed assets generally are things there and stick around for at least a year and that you paid a little bit of money for my computers or furniture. Depreciation happens when those things get old and worn over time. The IRS let you write off expenses in your business, what a big expense, they make you take the money a little bit each year instead of all at once. That’s depreciation.
if you have depreciated it each year then in theory that value was going down to, so when you sell it and make money, that money has to go against your depreciation. If there’s anything left over then you have to pay tax on that.
so if you’re not keeping track of your fixed assets you can’t do any of these things and your accountant generally won’t know what assets you have or to ask about them unless they are also your bookkeeper, which I don’t recommend.
It actually is life or death like I say in the introduction to my new book.
it’s actually the most common thing in the world. Well that might be a little bit of an exaggeration, but over Bangor taxes happens all the time. I just met with someone who got an audit from labor and industries. She got something in the mail saying that she owed some money so she wrote a check and send it in. The thing in the mail actually was just an estimate of how much they thought she owed because she didn’t file the return.
I come from a school of thought that says everybody’s busy and everybody wants to do a good job. This includes auditors.
what an auditor is thinking about looking at your business, what they’re looking for are clues to a puzzle. They’re looking for mathematical and logical consistency. They’re looking for a business owner who is being helpful.
your job as the business owner is to do whatever you need to do to keep your business alive right? So you’re out for different things at the outset. The thing is the most business owners doing wrong as they represent themselves because they think they can handle it. The truth is auditors are sneaky, and they get egg knowledge meant and promotions based on how much money they collect but also on how well they operate managing their cases.
They are much happier talking to a professional who speaks their language, because it speeds up their ability to manage cases and it gives them some confidence that they can believe some of the information that being given to them. so the way to handle an audit is to let somebody represent you, and somebody you feel is knowledgeable enough to help keep you out of trouble. And if you’ve read some of my other articles, you’d know that I think business owners are in trouble right from the beginning. It’s just a matter of whether regulator is looking at you or not
this year, Sound Bookkeepers is offering a free Tax Hotline for entrepreneurs. Simply call 844 TAXESWA.
53% of college grads are underemployed or unemployed and 70% of college grads have degrees they can’t apply in the workforce. This is one reason why the self-employment lifestyle is gaining ground. These days, the word startup is so common that people consider starting up their own business as a viable alternative to self employment. Unfortunately, less than half of startups survive 5 years. I’ve seen many companies fail. Since one of the best ways to keep a company alive is to have accurate reporting data, be sure to keep good bookkeeping records as that is where you’re likely to look first when trying to improve profitability and make it through those first few years.
here’s one way I can explain this. This is the accounting equation Assets = Liabilities + Owner’s Capital + Revenues – Expenses – Owner’s Draws
For Corporations it’s Assets = Paid-in Capital + Revenues – Expenses – Dividends – Treasury Stock
The simplified version is Assets = Liabilities + Equity
The equation has to be in balance. Every transaction affects 2 accounts.
Thus, if an asset goes down (like the bank account did when you took money from it to pay the loan), then the equation must come back to balance. This means that either another asset has to increase by the same amount (like if you were purchase a new stove, or if you simply transfer it to another account).
The loan is a liability. The cash in your bank is an asset. So if the asset went down and the liability went down, that would keep the equation in balance. if you pay off the loan, then you did not expense the money, you simply reduced a liability. To expense something means it’s not already owed.
I just finished reading the 2015 Infusionsoft Small Business Market Research Sales and Marketing Report. (whew, that’s a lot to say). Turns out, word of mouth is still the number one way small businesses grow. And can you believe it, there are people trying to be successful in small business who don’t have a website, lots of people. If you have a business card, then you should have a website in my opinion. They play the same role; They answer the questions who are you, what do you do, where do you do it, and what is your contact information. They are marketing tools designed to help your customers find you. If you don’t have a website for your small business, please contact me because I have connections who understand how to do a good job inexpensively.
FOR IMMEDIATE RELEASE
Sound Bookkeepers Receives 2015 Best of Shoreline Award
Shoreline Award Program Honors the Achievement
SHORELINE October 1, 2015 — Sound Bookkeepers has been selected for the 2015 Best of Shoreline Award in the Bookkeeping category by the Shoreline Award Program.
Each year, the Shoreline Award Program identifies companies that we believe have achieved exceptional marketing success in their local community and business category. These are local companies that enhance the positive image of small business through service to their customers and our community. These exceptional companies help make the Shoreline area a great place to live, work and play.
Various sources of information were gathered and analyzed to choose the winners in each category. The 2015 Shoreline Award Program focuses on quality, not quantity. Winners are determined based on the information gathered both internally by the Shoreline Award Program and data provided by third parties.
About Shoreline Award Program
The Shoreline Award Program is an annual awards program honoring the achievements and accomplishments of local businesses throughout the Shoreline area. Recognition is given to those companies that have shown the ability to use their best practices and implemented programs to generate competitive advantages and long-term value.
The Shoreline Award Program was established to recognize the best of local businesses in our community. Our organization works exclusively with local business owners, trade groups, professional associations and other business advertising and marketing groups. Our mission is to recognize the small business community’s contributions to the U.S. economy.
SOURCE: Shoreline Award Program
A client asked this question so I’m copying the answer I sent them in the hopes it will help you.
“We are about to buy a computer and I’m about to start paying for software subscriptions. I’m assuming we’d just charge those to our business account, yes?”
That depends on how you plan to do your continuing billing. Are you going to do the work, create an invoice, send it to them and then wait to be paid?
get a deposit, bill against the deposit and then provide a progress billing statement and ask for a replenishment?
get a deposit, use it up and then continue working and after you have billed some more work, create an invoice, send it to them and then wait to be paid?
one of the above but when it’s time to get paid, you would generate an ACH from their account to yours to pay the invoice or bill to a credit card they have on file?
Those are the standard ways. If the amounts are in the several thousands, checks are best to avoid unnecessary credit card fees. But, if you have several clients and they are different billing cycles for different amounts, then credit cards make the collection process easier.
Hope this helps.