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When it comes to small business finances, there are a few options for record keeping and monetary procedures. You can keep an old-fashioned checkbook and record all your purchases in a manual ledger. You can incorporate Excel spreadsheets and other basic documents into your process. What most small businesses find effective, however, is incorporating financial software like QuickBooks® into their processes. QuickBooks® is especially helpful when it comes to tax returns. Here are a few tax tips for using QuickBooks® in your small business.
If you are using QuickBooks®, make sure you record all your inventory, expenses and income in the system. The program has various options for making this easy and confusion free. A the end of the year, if you have diligently recorded your information, the information and reports necessary for completing your business tax return can be accessed with a click of your mouse.
Keep Personal Business Separate
Many small business owners make the mistake of incorporating personal finance into their business structure. This can be a huge problem at tax time and can result in both your business and yourself owing additional taxes. Pay yourself through the QuickBooks® payroll function and take out appropriate withholding. Otherwise, do not mingle your personal money with the business. If you’d like to take advantage of our payroll services, contact us for more information.
Use Import and Export Functions
You can link QuickBooks® with existing data or bank records in order to reduce the amount of time you spend entering information. You can even link it to inventory databases and invoicing systems for a one-stop finance shop in your business. When you avoid manual entry of data, you reduce the chances for mistakes on your paperwork.
You can also export information from QuickBooks® into reports and files. This can be a huge help during tax time, especially if you work with an outside accountant. You can create files to send your accounting firm that detail your company’s financials for the entire year. Because accountants are familiar with QuickBooks® reports, you can reduce time spent explaining your numbers or searching for additional data.
QuickBooks® is Remote
The newer versions of QuickBooks® offer multiple logins and remote capability. Not only does this mean you can access your records from anywhere, it also means those records are stored on a secure web server. Even if your business experiences a hardware failure or other physical issue during the year, your tax information and records are still safe.
Using QuickBooks® is an easy way to increase the efficiency of your financial procedures, ensure data integrity, and reduce your stress at tax time.
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