Bookkeeping is at the heart of a company’s success, and errors can cost the company significantly. Below are five ways to keep good books:
1. Save receipts less than $75. While such receipts may not be required by the IRS, they provide backup documentation for the many deductions you may claim.
2. Don’t do it yourself. Having a competent bookkeeper coming in to handle the books can be extremely beneficial in that they have the skills to do the job quickly and efficiently and will provide a second pair of eyes to find errors and make suggestions.
3. Track reimbursable expenses. Small business owners often pay for expenses out of pocket or with their own personal credit card then make the mistakes of failing to track and submit these expenses.
4. Properly classify employees. The proliferation of independent contractors, consultants, and freelancers has made it difficult to determine who is on staff and who is not. This results in misfiling when it comes to filing taxes since there are different rules and regulations for employees and non-employees.
5. Set clear communication. Having someone handling bookkeeping is only effective if they are filled in and kept up to date on all financial transactions.