One of the best ways in which you can make your home based business successful is to keep good records. You do not need to hire a bookkeeper to track the business expenses and income but it would help. Until you can afford a bookkeeper or accountant it is wise to keep careful records of all your expenses and income.
A simple filing system is all you will need. You will need to track all income, which is easy because anytime you are paid for a product or service, this is considered income.
Next is expenses, a little more complicated but not impossible. I can not state often enough, keep receipts from everything for anything concerning the business. Do not mix business and home finances or personal finances.
Us a ledger to help organize all the needed information and documents necessary for completing tax payments and returns. By documenting and entering the details of all cash flow and business transactions in a simple ledger book. A two column ledger is all you need, fill it in once a month and you will be ahead of the game come tax time.
Take the ledger to your tax prepare and you do not need to spend days pulling out receipts and statements. You will have all the arrangements for tax payments and tax return requirements completed at a much faster rate.
Bookkeeping is not tax preparation, it is the process of keeping the business books up to date. It's keeping records and receipts of everything you spend money on in ledger. You will be your own bookkeeper, just fill in the blanks and the tax preparer will do the rest.
1 - Keep an accurate record of business transactions, income versus expenses
2 - Update your books monthly
3 - Keep all the receipts - back-up all your entries in the ledger
4 - Making it a habit right from the beginning. Choose one day a month for bookkeeping.
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