Five Easy to Follow Bookkeeping Tips
Do you have a hobby or business? Do you expect to make money from your efforts? If the answer is “YES,” you will need to establish yourself as a business! Make sure you:
- Keep business and personal expenses separate
- Open a separate checking account for your business
- Draw money out of your business checking account to deposit into your personal account
Businesses are for profit. If you continually report losses to the IRS you may be considered a “hobby”. Remember to report all income and deduct expenses when itemizing.
Having an efficient filing system makes life a whole lot simpler! Set up a filing system for receipts that need to be recorded. Instead of filing by month your receipts by month, file similar expenses together. For example, create a file for office expenses, travel, business meals & expenses, phone, accounting and legal fees, etc.
It is essential to set up a bookkeeping system. You will need to decide if a paper or computer system is the best option for you. Choose one that you can understand and will use regularly. Here are some of your choices: spreadsheets, QuickBooks, Peachtree, or Quicken.
Set up time on a weekly or monthly basis to record your transactions. Track your income and expenses on the system that you decided to use, either computer or paper. Having accurate records will help you make decisions as well as prepare you for tax time.
Do you have bookkeeping questions? Evlyn Carlile can help. Contact her via email at email@example.com.