A big shout out to all Dads today; Happy Father’s Day!
My husband, Will, is still on the road with the Miami Heat, so we are keeping our celebration small with just the abuelos (aka grandpas).
Speaking of fathers, I have to thank my dad for my love of math, all things numbers and for the inspiration he gave me to become an entrepreneur. As a child, I watched him come from another country with nothing and start his own business. As a CPA and bookkeeper to business owners now, I’m inspired by him to work hard, which I translate into thinking of ways business owners can not only simplify their bookkeeping, but also avoid an audit.
Whether you do your bookkeeping yourself or have someone do it for you, here’s some advice:
DO YOUR BOOKS ON A REGULAR BASIS – Some people love to procrastinate and leave their bookkeeping to just once or twice a month. This means hours and hours of bookkeeping. If you work on your bookkeeping for a few minutes a day, you will avoid a big backlog and avoid forgetting to input crucial information.
ORGANIZE YOUR RECEIPTS – I have many clients who hand me a bag of receipts every month. That’s okay because we have an understanding that I will organize the receipts for them. But if you have your own business, try to avoid this. Try to file away or scan all your receipt immediately. Organize them by month, so you can find them quickly. The more organized you are, the less likely you are to be audited.
PAY WITH CASH – If you don’t have cash, don’t charge it. This cash-only on purchases practice will make you think twice about buying unnecessary items. You can also try to negotiate with vendors who may offer a discount for paying cash upfront. Remember this doesn’t mean you shouldn’t get a receipt; so ask for one.
SELF-“AUDIT” YOUR BOOKS – You can do this yourself or hire someone. DM Accounting is hired to analyze the books of a number of businesses every year. Basically this means making sure that all expenses are accounted for. This type of analysis can help cut unnecessary spending immediately.
RETAIN YOUR RECORDS – Business owners need to keep all financial statements, ledgers, tax records, business journals, invoices, receipts, bank statements, credit card statements, and so on and so on for a certain period of time. Here’s a quick and helpful IRS link http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Recordkeeping.
I hope these tips help you avoid an audit and streamline your bookkeeping. If you have specific questions about these tips, I would love to hear from you, so e-mail me.
So I want to send a big hug to all the fathers out there. I thank my parents, and especially my dad on this Father’s Day, for the gifts of love, entrepreneurship and math he has shared with me. Thanks Daddy! Happy Father’s Day!
