The Most Popular Bookkeeping Myths: Busted!
Bookkeeping can be an intimidating and dreaded part of business for many business owners. To make it even more challenging, there are many stereotypes and beliefs about bookkeeping that can make it hard to distinguish the facts from the rumors. You can risk unfortunate and preventable consequences by going into business ownership with a closed-minded perception about bookkeeping that can cause you to delay it and most likely not take it very seriously. Delaying the record keeping of your business will only cause trouble with the IRS, and make the future of your business questionable. We have busted a few of the most popular bookkeeping myths with professional suggestions to put you at ease and help you fully understand the truth about bookkeeping.
- I only need bookkeeping around tax time.
Tax time may be the most important few weeks for a bookkeeper, but that is not the only crucial time. It is a necessity to keep records for your business throughout the year. You’ll find that this will make filing easier and allow you to take full advantage of any opportunities that arise while also detecting any issues that may come out of it. Maintaining your bookkeeping records will keep your business consistent, up to date, and make financial decisions the easiest they can get.
- If I have accounting software and can do it myself.
Some accounting software can be fairly simple to use, but data entry does not help you have a working knowledge of how your business financially operates. Anyone can enter numbers into software, but do you know what the generated numbers and reports mean? Bookkeepers will be able to enter transactions, while fully understanding how they need to be entered and categorized for maximum benefits. If you do not correctly enter large assets, expenses, discounts, refunds, or all of your income, you can miss out on tax advantages. If you are definitely set on doing the bookkeeping on your own, it is suggested to contact a local bookkeeper to review your work every so often for any inaccuracies or suggestions. If requested, BOSS can provide you or an employee QuickBooks training to help you fully understand the software and be confident in your ability to handle the bookkeeping of your business.
- Small businesses don’t really need bookkeeping.
Not needing bookkeeping would mean your small business does not need to budget, review the future of your financials, understand the trends of your business, or know your greatest tax advantages (or disadvantages!). The more losses you report, the less taxes you have to pay. Consistent bookkeeping will keep your financials organized all year-long, making it easier to determine where your business stands financially. It will also make tax time smoother, and cheaper. Handing a thumb drive over with your company file already clean and entered is much cheaper than handing over a year’s worth of receipts and documents in a box for them to go through.
- It is okay if I pay for some business expenses out of pocket.
Many think it is okay to take funds out of one to put into the other, as long as they put the money back eventually. In the beginning it will be difficult to keep your expenses separate, but getting into the habit of not mixing them early on will protect both you and your business. Keeping finances separate substantiates the corporate veil of your small business. Not only does it prove professionalism and identify your business as its own entity, but it will cause bookkeeping to be more accurate. The more accurate your bookkeeping is, the less stress you will undergo and the better chance you have of filing going smoothly. The amount of money you spend on opening and maintaining a bank account for your small business will be far less than the fees and penalties you can get from the IRS.
- Hiring a bookkeeper is too expensive.
BOSS works with you to save time and money. By outsourcing to us you are allowing yourself to spend more time with potential clients and focus on direct issues that can affect your business. By having your books done properly from the beginning, you can avoid having to fix costly errors at tax time. It will almost always cost less to maintain proper bookkeeping procedures throughout the year, than it would be to hand a box of documents and receipts to your accountant when it’s time for taxes. Contact us today for more information about BOSS prices and services.
The bottom line is if you work with the right bookkeeping service provider, understand the importance of record keeping, and have the knowledge to read and assess financial reports, then you have a much greater chance of running a successful small business. Knowing the difference between the myths and the reality of bookkeeping is a great way to get started.
Bookkeeping Help in Wilmington, NC
BOSS is a growing firm of local business advisers who are committed to providing responsive service, strategic thinking, and competitive pricing to our clients. If you’d like help or to learn more about running a small business in Wilmington, NC give us a call at (910) 338-1198, stop by our new office located at 3901 Oleander Drive, Suite G in Wilmington, or click here to fill out our online contact form. We look forward to hearing from you!