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Small Business Accounting Tips

Having an accountant on your in-house team is ideal, but not all small businesses can afford to have one. If this is the case, you can do it yourself or utilize some of the employees you may already have to do the accounting tasks.

It's important to keep your personal and business finances separate in order to keep things straight when it comes to tax time. Don't confuse yourself more by trying to mix the two together.

You want to keep thorough records of business transactions and accounts receivables. When tax time rolls around, you can just use these to add up the figures instead of spending time shuffling through scraps of paper in a shoebox.

Balance the books right away. Don't wait for several transactions to occur and then decide to balance them. Some business owners put it off and then the task seems insurmountable.

Be sure to check your financial statements often to determine where you're spending too much or too little. You may discover if there are ways to cut costs in your small business or if there are ways to budget some extra items into your business.

Always keep up to date on the new tax laws and regulations. Don't wait until tax time to check them out. There may be something you can use now that would help you save money when it's time to file your taxes.

Don't be afraid to use accounting software. There are many out there to choose from and they can keep track of all your information in one place. In most cases, all you would need to do is type in the necessary information and it does the calculating for you. Most accountants use these anyway, so why not do it yourself?

Always keep copies of all of your invoices in case the originals get lost. If using computer software, make sure you back up all of your files so that you have a copy in case something unforeseen should happen.

Research all of the possible tax deductions you can use in your business. Some items are deductible in full, while others take depreciation into account. Also, the tax strategy will be different for small businesses operating out of the home versus brick and mortar businesses that are independent from the household.

An accountant can take the headaches away for you to some degree, and you don't have to hire one onto your staff. If you can't quite afford one yet, then take pleasure in knowing that all is not lost with the vast amount of do-it-yourself resources available to the small business owner.