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Ah, paperwork. They may as well be honest about it and just call it homework. But don't sweat it. Keeping track of your books is critical to the success of your business but it doesn't have to be a nightmare, take it from me!
There are two ways to go about it: Single-entry and Double-entry. Single-entry is the easiest, but Double-entry helps you avoid mistakes. Single-Entry: Ricky and Squig Man use the single-entry system. They just keep records of their monthly receipts and monthly expenses. That way everything would be in order when it came time to file his Business Return. Double-Entry: Sara Strong, a girl of great detail, went for the double-entry system. That's what my job is… I record every transaction in a journal as a debit entry in one account, and as a credit entry in another account. At the end of the day, I always knew how much 'Rowdy Nails' owes and how much we owned. To be sure, by the time tax season rolled around, filing her business return was a snap. |
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| Automate from the start!
Utilize computer software to track all expenses and income.
Use an accountant for your tax return. Hire a bookkeeper or get an inclusive tax preparation package from your accountant. The package should include bookkeeping, tax filing, and tax planning. |
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