A home-based business just like any other business needs to keep good records, especially good accounting records. Unless you are an accountant yourself, you will probably want to use the services of a professional accountant, preferably a CPA.
You don’t need to have the services of a CPA all the time; just when the taxes are due. In the meantime however, you’re responsible for the day to day recordkeeping. The bookkeeping software of choice for most home-based and small businesses is QuickBooks. This software can handle a wide variety of business transactions and most accountants are already familiar with QuickBooks. When it comes time to have your taxes done, you can simply select a menu option to create an Accountant’s Copy – and send that off to your Accountant!
Most professional accountants can assist you in setting up your QuickBooks file and they can recommend procedures that will keep your business out of hot water. Problems with the IRS and other government authorities can be avoided by good recordkeeping and solid accounting practices.