Accounting Tips for Your Small Business
September 10, 2014

Accounting Tips for Your Small Business

When first starting your small business, it’s important that you’re aware of and understand the financial aspect of doing so. If it’s difficult to grasp how the finances work, our firm strongly recommends that you invest in accounting services to help you run your business. We know that owning your own business can be a little overwhelming, so below we have provided some easy accounting tips to help you get started.

Accounting Tips

  1. When first starting out keep it simple with sole proprietorship. This form of ownership requires no special communication or filings to the IRS until you start paying employees.
  2. Be aware that a sole proprietorship may require you to acquire an occupational license if your county or municipality mandates one. Also, you are liable to settle all state or city tax collections on retail or wholesale sales your business accumulates. Service businesses and most cross state sales are usually exempt from state tax collections.
  3. Purchase a personal liability umbrella policy if the personal liability of a sole proprietorship concerns you. However, the best way to avoid any personal liability is by investing in accounting services.
  4. Focus on building your business without communicating with the IRS until you file your first personal income tax return.
  5. Make a plan to ensure that your business thrives. If it fails under sole proprietorship then stop your business proceedings and file a final Schedule C with your next personal return.
  6. Pay yourself by taking the money out as a draw. No payroll taxes or quarterly forms needed.
  7. Understand that a “write off” doesn’t mean that expenses are free; it means you can save paying some taxes on that income if you spend it for certain purposes.
  8. After you pass the five-year trial period for your business, then you can discuss an alternative entity that may save you taxes with a CPA.

At Verdeja, De Armas & Trujillo, LLC, our accounting department has developed a trend in providing financial savings and tax benefits to our clients. With our accounting services you will experience a reduced salary expense, fraud prevention and improved financial controls and organization to start your business off on the right foot. Contact us today for a consultation!