5 Explosive Bookkeeping Tips

by Judy | Nov 2, 2011 | tips

1. Always keep your business finances separate from your personal finances. Don’t give the tax auditor a reason to audit both.
2. File all your tax compliance reports on time to avoid penalties, even if you can’t pay the amount owing.
3. Keep organized by:
  - developing a method for handling all your paperwork;
  - entering your bookkeeping data in batches; and
  - reviewing your bank statement and financial reports monthly.
4. Audit proof your records.
  - Keep all your receipts, no matter how small the amount and make sure they are legible. Receipts you must keep include debit receipts and credit card receipts.
  - Deposit all your business cash flowing into the business … so you can prove what was income (taxable) and what was contributions or loan proceeds (not taxable).
5. Keep a business journal to diarize your logic for your business ventures. It will help show you incurred the expenses with the expectation of profit.