With business bookkeeping and basic tax tips for new and old entrepenuers

Tuesday, March 31, 2009

Bank and Credit Card Statement Tips

The other very important set of papers you need for doing your books is a set of bank and credit card statements used for your business. Some small businesses, especially when starting out may use a personal credit card and even their personal bank account for purchases. As in my previous post, I advise to not do this or at least keep it to a minimum.

It is also a good idea to request the canceled checks from the bank. Some banks send only a copy of the checks in the statement but the important thing is that the print on the check is readable. Some banks make small copies of the check that is almost impossible to read. This is where it is helpful to keep a check register where you note the checks you have been writing. If you don't have a copy of the check or have an incomplete register then you need to write down by each check who the check was made to and the amount. Otherwise if you can't read it you can't record it properly.

Although banks offer "Online Banking", I have generally found that you may not able to view a check immediately and either you have to request the bank copy and wait a day or two to view it, or the bank may charge you to request a copy that is over 60 days old, sometimes as much as $3.00 a copy, which is bullshit. That is just another fee banks can hit you with so don't depend on online banking.

Also make sure that you have every month needed and are not missing a month or two because that will delay and/or throw off the bookkeeping records. I inevitably get people who bring me their statements and have one or two months missing. That causes delays and interruptions in the work flow.

If you are using a personal credit card, I recommend you highlight the items that pertain to the business to make it easier to go through the statements.

Usually the first month or two you may need to attach an explanation as to what some of the expenses are for. I recommend you do this for items that are not obvious as to what the expense is for.
Next: Receipts

Thursday, March 12, 2009

DBA or Incorporation papers

Many times for tax offices and banks, you will be asked to present the documents showing your DBA, or Does Business As and your articles of incorporation if you incorporated. A Does Business As is usually applied for at your local County Clerk’s office, however you may need to check with your local government office to find out where to apply for one. This document basically tells others that you are doing business under a certain name, let’s say Sunshine Floor Cleaning, but gives the information as to who is behind that business name. This document generally has a low cost of about 20.00.

Articles of incorporation are generally applied for with your Secretary of State office and are done on a state level. These generally cost around $350.00 (filing fee). This makes the business is own entity and it then has to file its own tax reports on a local, state and federal level. Various tax offices may sometimes ask for a copy of your “articles’ which is why it is a good idea for your accountant/bookkeeper to have a copy of these. This saves you the time of having to look for these every time a particular tax office requests them. These are also often asked for when opening up new bank accounts and/or applying for loans, so keep plenty of copies or have it scanned to your computer so you know where they are.

Next : Bank and Credit Card Statements

Friday, March 6, 2009

What information should I gather to start my books?

This is the list I give to new clients to bring to me to get started on their books.

DBA or Incorporation papers

Bank statements

Credit Card Statements used for business

Receipts for Expenses

Sales figures

Loan documents for any business loans

Contracts on cars purchased

Information on vehicles used in the business

List of Assets Purchased for the Business

Contracts entered into, such as bids for jobs won

Information on employees

Tax return for prior year

I will discuss what these are in more detail.

Next: DBA or Incorporation papers