Are you a small business owner who struggles to keep your books balanced? Do you feel like you’re too busy juggling all the other responsibilities of managing the day-to-day operations? If so, you’re not alone. Bookkeeping can be tedious and intimidating, but with the right tips and tricks, it doesn’t have to be a struggle. We share some of our favorite bookkeeping tips for small businesses, so read on and start getting your books in order!
1. Separate Your Personal and Business Expenses
Mixing your personal accounts and business accounts is asking for trouble. Skip any confusion and create separate bank accounts. Having a dedicated business account provides a clearer picture of your business cash flow allowing you to track expenses more easily. Solely using credit cards for all business transactions is a great way to stay on top of expenses as cash payments can easily be overlooked.
2. Pay Attention to Receivables
Every business likes to get paid but managing those payments isn’t as much fun. Marking an invoice as paid when payment is received seems easy, but all too often customer payments are left to reconcile at a later date. It’s important to keep track of your transactions as they happen. Applying customer payments weekly will save you time and money – and a big headache come tax time.
3. Pay Yourself a Salary
While paying yourself may not be the first thing that comes to mind as you’re building a business, if your business earns enough money, it should be. Paying yourself a salary is an excellent way to keep your business and personal life separate and keep your books in order. Rather than having business pay your personal expenses, have them write you a check that is deposited into an account just for those payments.
4. Log Expense Receipts
The importance of keeping business receipts cannot be overstated, as they help you keep accurate records for your taxes and lend credibility to any tax reporting. Whether it’s buying dinner for a client or paying to create a new logo for your company, all purchases should have some type of receipt with them so you can keep an accurate record of all business expenses.
5. Hire a Professional
Too many small businesses struggle with the day-to-day tasks of keeping their books, and it’s a problem that can be easily avoided. Your business requires your full attention as you grow it into something amazing—outsource these tedious jobs so you have more time to focus on what really matters, making money!
As a small business owner, you have to be mindful of your accounting and finances. These tips will help make bookkeeping less daunting and ensure that your business is on the right track financially.
There are many different options for accounting and it can be difficult to decide which is the best for you or your business. You can hire an accountant to do your books or you can use accounting software. Each has its own pros and cons, and it helps to understand them before making a decision. In this blog post, we will discuss the pros and cons of hiring an accountant vs. using accounting software. Hopefully it will help you decide which option is right for you!
Hiring An Accountant
Hiring an accountant is a good option for businesses that don’t have the time or resources to do their own accounting. An accountant can help you with everything from bookkeeping to tax preparation. They will keep your books in order and make sure you are compliant with all applicable laws. Hiring an accountant also gives you someone to rely on for advice and support. A main benefit of hiring an accountant is the time it saves. You can focus on other aspects of your business and personal life instead of working on your finances for hours on end.
However, It can also be difficult to find an experienced accountant who is knowledgeable about your specific industry. Additionally, you are limited to the services that the accountant offers. If you need help with something that the accountant does not offer, you will have to find someone else to help you.
Using Accounting Software
Using accounting software is a good option for businesses that want to do their own books but don’t have the time or resources to hire an accountant. The software gives you access to all of your financial information in one place, which makes it easier for you to keep track of what’s going on with your business and make decisions based on that information.
However, using accounting software can be very time consuming and difficult to learn. You need to be able to understand financial statements in order to use the software effectively. If you don’t have any experience with accounting, it will take some time to learn how to use the software and understand what the statements mean. Additionally, you are responsible for entering all of your financial information into the software, which can be a time-consuming process. If you find yourself struggling with the software, it is wise to consider hiring an accountant.
In conclusion, both hiring an accountant and using accounting software have their own pros and cons. It is important to weigh the pros and cons of each option before making a decision. If you use accounting software, make sure that the software is easy to learn and use before purchasing it. This will help ensure success!
If you hire an accountant, make sure that you hire someone who is knowledgeable about your industry and has experience working with businesses like yours. We pride ourselves at Motl Accounting on helping various types of businesses and individuals with their taxes. Whether you need accounting or payroll services, we can help. The most important factor when it comes to your finances is peace of mind and we offer that to our clients.
Need help with your business finances or personal taxes? Contact one of our experienced professionals at our West Dundee location to get the help you need.
This article provides some helpful tips on how you can cut your tax bill by making smart depreciation choices, maxing out your retirement contributions and buying the right items. Saving money is critical for everyone, but if you are self-employed or own a small business, these savings can be especially important.
If you follow these tips then you should be able to reduce your tax bill.
- Tip 1 – Reduce taxes, cut taxes, tax refund
- Tip 2 – Reduce taxable income, reduce business profits
- Tip 3 – Hire an accountant
Tip 1 – Reduce taxes, cut taxes, tax refund
For many years, you could reduce your taxes by depreciating the purchase of vehicles or equipment. However, in recent years, this deduction has been severely limited, thanks to the Tax Cuts and Jobs Act passed at the end of 2017. Before making any major purchases for your business, consider if it would be better to wait until when these limitations are likely to be repealed. However, speak with your accountant to know when that could be and to make the final determination.
Tip 2 – Reduce taxable income, reduce business profits
Even if you can no longer reduce your taxes by depreciating items, you may still be able to reduce the amount of tax on profits from your business. You may reduce this amount by contributing as much as possible to a retirement account. You can reduce your taxable business income this way if the retirement plan provides a tax deduction for contributions and defers tax on earnings and contributions. There are also other ways to reduce taxes like deferring income and accelerating deductions, but it’s best you speak with your accountant to ensure you are doing it the right way.
Tip 3 – Hire an accountant
Getting an experienced accountant to help you manage your books and look for deductions you deserve is highly recommended. Our accountants at Motl accounting have identified several deductions for businesses they weren’t aware of. Accountants have the knowledge and experience to analyze your finances and get you the best deductions. So consider hiring a well experienced accountant like us to get the most out of your deductions.
Tax laws are constantly changing based on politics, economic situations and events. Many of these changes present opportunities that you can act on if you know they exist. At Motl Accounting, we constantly take note of the changes in these laws and apply them to help our clients. We also provide our clients with the best advice on cutting their tax bill. So if you’d like us to look at how you are structured and treating all transactions, contact an experienced tax professional here at 847-426-2100.
The Great Resignation and other factors have led to a shortage of workers and business leaders are having to find creative ways to recruit employees. It currently helps to be flexible when looking for workers to keep your business operating at the pace it should. For example, consider part time workers or freelancers for full-time positions till you can find the employee you are looking for.
The focus should be on your business production output and how you can get there with the workers you can get. We have a list below of where and how you can find workers to help you permanently or temporarily.
- Advertise on Job Board – Job seekers visit job boards like Indeed to seek employment. Posting your openings there can reach many seeking employment. You can also sponsor your openings to reach more people seeking jobs in your industry.
- Advertise on Social Media – Post your positions on social media and use their job boards as well. LinkedIn and Facebook have places where you can post open positions with the descriptions, salary and more. Your open positions can gain lots of exposure through social media and in turn lead you to the right candidates.
- Ask for Referrals – Ask for referrals through your local business chamber, local community events and even friends and family. You’ll be surprised at how they may be able to connect you to a suitable candidate or point you in the right direction.
- Attend Career Fairs – Attend physical and virtual career fairs to meet with job seekers. Many career fairs focus on industries, so search for those that are in yours to have access to those looking for jobs in your industry.
- Recruit Part timers – Consider part time employees for full time positions. This might warrant managing more employees on your part. However if the success of your business depends on headcount production, it’s worth considering
- Recruit Freelancers & Contractors – Hire contractors who can help you in any capacity till you find an employee. There are also many freelance websites where you can find professional freelancers who can assist you.
The pandemic led to a large number of professionals working from home instead of their office space. Many may be wondering how this will affect their taxes and if they’ll get a tax break.
The general thinking could be leaning towards you getting a break as an employee working from home, but that may not be the case. Tax breaks of the sort ended with the 2017 tax cuts with little exemptions. This means employees who don’t get reimbursed for their expenses by their employers can’t claim those expenses the way they used to. It’s more complex If you are self-employed and there are rules to be mindful of. You can still deduct a home office and some other expenses related to working from home, but want to ensure you are following the guidelines. It helps to speak with an accountant to get more clarity, but here is some helpful information:
What Can I Claim On My Taxes Working from Home?
You are not supposed to deduct your expenses when you work from home as an employee if your taxes, social security and medicare are deducted from your paycheck. Prior to the 2017 Tax Cuts and Jobs Act passed by the United States Congress, employees could deduct expenses like mileage, home office supplies, work outfits and more. The IRS now tends to qualify remote employee expenses of that manner as “miscellaneous itemized deductions” and since 2018 itemized deductions can only be taken if they exceed the standardized deductions.
Self employed professionals and business owners can still deduct for their office, meals, mileage supplies, marketing and more. Expenses you get in regards to working from home are tax deductible. It’s important to note that the expenses need to be exclusive to the business’s operations. A space used as an office by day and bedroom any other time would likely not be compliant. The space being used needs to be exclusively used for your business.
Tax Breaks Due to Covid-19?
There aren’t currently any special tax breaks for those working from home due to the pandemic. You can however count on a good accountant to ensure you get any tax breaks related to the pandemic if there are changes in the future.
In conclusion, the changes to the tax laws with regards to working from home may be confusing as time goes on. Having a professional assist you with your finances as an employee or business owner can make a difference. Accountant’s like us here at Motl Accounting are mostly aware of these changes and can help you get the most out of your taxes.
If you need to know more about what you can claim on your taxes, contact a professional at We’ve helped several individuals, families and businesses with getting the most they deserve out of their taxes.