Happy New Year everyone! The holidays are over and the year-end work is just beginning! If you are organized throughout the year, this will not be too terrible of a task, however, it’s been my experience that if you own your own small business this time of year can be a huge pain! Why? It’s simple, you spend the entire year working your business and simply don’t have time for certain tasks that you can do at a later date ~ it’s human nature. I know this is true because I have done it myself! I have two home-based businesses, and for many years I would leave my own bookkeeping to after the first of the year and get it ready only when I need to take my taxes into my CPA. It’s a huge pain no doubt. Why did I do that, knowing better as I do? Simple, I was running my businesses even if one of those businesses was bookkeeping!
Two points I would like to make with this. First, of course, is to hire someone like myself to do the bookkeeping for you. It’s a huge time-saver during the year and certainly at year-end. For a number of clients I “do their books” on a monthly basis, enter their checks from the checkbook register into my software, record their income, either invoice by invoice or in aggregate, reconcile their bank statements and prepare financial statements. The exact procedure changes from client to client, but those are the basics. Yes there is a little more expense for them, but that leaves them the time to run their business and do what they are good at – making money and working their business, regardless of what type of entity it is. They also know that having me to this type of work will hopefully allow them to breathe a little easier if they are not on top of all the various bookkeeping aspects of business!
My second point, is the more important point of the two. Doing bookwork is part of your business. That may seem like a “duh” statement to you, but I can’t tell you how many folks think it’s only for brick-and- mortar companies. You can’t just simply go through your personal checkbook, jot down the expenses, and subtract that from what you think you made and plug it onto a schedule C tax form and call it a day. If you are just starting out with your first business this may be a common scenario. I also have known folks that they thought that they were just doing a hobby that they loved when in actuality they had themselves a genuine business going. I previously have written about “What is a business” if you are wondering what that is all about. When you start out in business you must understand that it’s much more than just working the business; if you are let’s say a mechanic, you don’t just buy parts, install them, and deposit a check for what you charged your customer. Bookkeeping, insurance, sales and or payroll taxes, not to mention both federal and state ID numbers, licenses, permits, rules, regulations all need to be worked through BEFORE you go into business.
In any event, that is in part what this blog, and what I am all about. Here to help if you need help and I truly hope that this blog will help the new business owner start off on the right path to having a successful and thriving business.
In doing some research, I came across another blog that I thought was very helpful. “MyCorporation” is a great blog with a ton of information and a great resource in helping business owners, or potential business owners think of what’s all involved in starting up a business. Deborah Sweeney, CEO of MyCorporation.com has done a great job with that blog, I encourage you to check it out!
I’m always looking for ideas to write about in my spare time (spare time will be hard to find being January, but I find this a great way to reduce stress, take a break from the year-end work and step back and think about the basics) ~ so please let me know what would be of interest to you. If you are interested in a topic, there will be others interested as well. Next up for me will be the 2014 mileage rate, how to track mileage and why it’s important to due it correctly.
By the way the business mileage deduction rate for 2013 was $0.565 per actual recorded mile.
The NEW business mileage deduction rate for 2014 is $0.560 per mile – a slight reduction over last year.
I hope you have a safe and wealthy New Year everyone!
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