When it comes to running a business, it’s important to keep your personal and business finances separated. This reduces accounting and tax problems and makes it much easier to manage your accounting books. Running a business already takes a great deal of effort, so it helps much to not have additional stress by managing your finances with bookkeeping tools and experts. We understand how important it is to properly manage your finances and the peace of mind that comes with it. We have helped over a hundred businesses with accounting and bookkeeping in the Chicagoland area and have gathered some reasons as to why you should separate personal and business finances to have a better understanding.
First off, you will want to ensure that your business is incorporated. Whether you choose to present it as an LLC, C Corp, or S Corp, you will want to ensure that it’s established with the right structure. By establishing a separate legal entity for your business, you will be able to protect your personal assets from your business debts, losses and lawsuits.
By opening business debit or credit cards, you won’t have to use your personal accounts for business transactions, and it’s the easiest way to keep your personal and business finances separate. In addition, a business credit card can help you build stronger business credit scores and could even boost your borrowing power which could help you qualify for business loans with lower interest rates.
- Open a business checking account
In addition to credit cards, you also want to open a business checking account and only make purchases for your business through it. Doing so let’s you have a clear and complete picture of your expenditures, which is ideal for when tax time rolls around as all you will have to do is review your statements.
- Create a salary for yourself
Seeing as you are the boss of your business, you will want to make it official. So, pay yourself. By creating a salary for yourself, you can write checks from your business checking account which can then be deposited into your personal account. This way, you can easily keep track of your payroll finances and ensure that your salary is being professionally handled as it should be.
One of the most efficient ways to keep your personal and business expenses separate is by keeping your physical receipts. So pull out those old-fashioned folders and place your receipts within them or upload them digitally. This will help with audits if the IRS ever comes knocking on your door, you can feel confident that you will be prepared.
- Track your shared expenses
As a business owner, it’s important to keep in mind that many of your business expenses are tax deductible and you will most likely have some expenses to write off! As a result, when you make purchases you will want to ensure that they are separate from your personal ones, which can be done by using your business debit or credit cards. Not only will separating your expenses make things easier for your accountant come tax time, but you will also be protecting yourself by keeping a financial record and continuing to keep receipts.
- Using personal items for business purposes
When it comes to your business, any expenditure that you can legally write off should be written off to save you money when tax time comes around. By working with a tax advisor, you can determine what’s deductible as well as how to keep the right records.
Properly managing your business finances is certainly of importance! These are just a few helpful ways to manage them throughout the year. Hopefully, you now have a better understanding of the complexities that are involved with running a business and managing your books. Working with an accountant can help with your bookkeeping, payroll and taxes and therefore make life and work much easier for you. Looking for an accounting solution that’ll provide you with peace of mind when it comes to your books? Get in touch with us here at Motl Accounting as we would be ready to assist. Our staff at our West Dundee, IL office assist many small to medium sized businesses and we look forward to assisting you.
The spread of the coronavirus clearly had an impact on the general business environment. For many businesses the crisis led to some decline in revenue resulting in making necessary adjustments to navigate the times and not put themselves at risk. While there are revenue opportunities for certain goods and services based on the impact of COVID 19 (i.e. masks), there are also opportunities in business operations. One of the advantages to decreased business activity is companies having time to make operational adjustments like back office accounting. If you are looking to make some changes to your accounting operations, here are some to consider that may help your business emerge from this crisis and any other stronger and better than before.
Get accounting online
Moving your accounting operation online is beneficial to your business, and any small to midsize company or organization should be running their accounting software on desktop or server-based software. Applications such as QuickBooks Online, Intacct, Xero, and others provide full accounting software functionality in a secure environment. We have a client portal for our clients at Motl Accounting which provides access for faster and more convenient communication and document exchange. No software installation on your computer is needed and any user from anywhere in the world can access, which makes it easier for your books to be managed anywhere.
Automate accounting process
Automating your accounting process eliminates the need for data with sensitive information to travel between systems via paper mail. Most online applications have electronic interfaces to banking systems. This eliminates the need to reconcile paper- based banking statements, as the information from your bank is always seamlessly provided to your online accounting system. These applications also connect to other specialized applications for billing and expensing in many instances, therefore reducing the time and effort required to reconcile through paper documents and manual entries.
Outsourcing some or all of your accounting operations is a great way to eliminate costs, decrease risk and free up time for you to focus on your business. Accounting firms are accustomed to cloud accounting and are in many instances more savvy in automating your accounting process. With remote access to software, data and a bookkeeper you will have access to a virtual accounting team that is available to you wherever you are. Beyond current circumstances, there is a sizable benefit to using an accounting firm like ours. Imagine the freedom to focus on actually running your business, confident that the books are right, having access to all your financials and a team of experts in your corner to help make sound logical financial decisions. This we’ve realized provides business owners and managers with peace of mind. Having the experts handle your bookkeeping, payroll and accounting lets you weather storms better.
If you are looking to automate and transfer your accounting practices online with a reputable accounting firm, we’d be happy to assist. Our team of accountants, bookkeepers and payroll professionals are ready to help you with your financials during uncertain times like these. Stay safe and connect with us via our website, social pages or call us at 847-426-2100.
Growing as a business is certainly of importance to most business owners. After all, you will want your company to flourish and continue to experience growth for many years to come. However, in order for your business to head in a positive direction, it helps to utilize proper financial planning and analyzing…that’s where an accountant comes into play!
Are you aware of how accountants can benefit your own business? Many might believe an accountant just helps with the crunching of numbers, but you’ll be surprised that great accounting practices actually help businesses grow and generate more profits in the process.
We understand just how beneficial an accountant can be for a business! We have helped several businesses in the Chicagoland area and provided them with great information that’s helped their businesses. That’s why we have gathered five ways in which accountants can help a business grow by working with an accountant like Motl Accounting in Dundee, Illinois. If you would like to discover what these ways are, be sure to continue reading:
- Creates Budgets & Forecasts Reporting. It’s important that every business has a plan for their future. Therefore, you will want to set up goals to achieve over the next year, as well as create charts and graphs to keep yourself on track and complete them. By working with an accountant, you can have reports created which will showcase how your fixed and variable costs compare with your sales volume throughout the year, providing you with knowledge of the market conditions that you will need for profitable growth.
- Discovers Key Performance Indicators. Every business has key performance indicators. If you are in retail, you might use inventory turnover for construction or it might be job costing. Your accountant should assist you with discovering yours, as well as advise on methods to set up reports, allowing you to see how they perform over time so that you can make the best decisions for your business for its future growth.
- Maintains Cash Flow Projections. If there is one thing you want to understand as a business, it’s your cash flow! After all, without cash your business wouldn’t be able to operate at the level you’d want it to. An accountant will create financial reports right out of your accounting software which will assist you with planning your key performance indicators and properly maintaining your cash flow. It’s important to know how to expand your product lines, increase direct costs and add employees in a way that keeps your cash flowing just as it should.
- Determines Your Businesses Value. It’s important that you know the value of your business so that you can plan for your future. Seeing as opportunities or life events can present themselves at any time, you will want to know how much your business is worth, given the current market conditions. An accountant can assist you with getting to determine your businesses value, so that you can maximize it and your tax liability. We have professionals we partner with at Molt Accounting that help our clients with business valuations.
- Creates Advisory Boards. For your business to remain fiscally strong and healthy, you will want to be advised and know what to expect for the years to come. An accountant will work with you to develop a system so that you can forecast budgets, cash flow management and an overall financial analysis for your business. This way you can monitor your goals and business growth through a dashboard and ensure that it is always headed in a positive direction.
These are just a few ways in which an accountant like us can assist your own business with growing.
Are you ready to work with an accountant in the Northwest Suburbs of Chicago to grow your own business and provide your peace of mind in the process? If so, please get in touch with us one of our accounting therapists at Motl Accounting, as we would be pleased with the opportunity to assist you with doing so!