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vangogh
08-06-2008, 04:35 PM
Being accountant for my business is one of the many hats I've worn since starting. How many of you act as your own accountant?

If you do what software do you use? I've been much more informal about my accounting than I should be. I keep good records, but I'm not always great about keeping them in the same place. I can always find them, but I know I could do a better job organizing myself.

I'd be happy to hear what you do to keep track of things so I could be more efficient with my own accounting.

Thanks.

KristineS
08-06-2008, 06:18 PM
I'm not my own accountant at the moment, but I'm thinking I will be someday. I'm not looking foward to it. Numbers are not my favorite thing.

vangogh
08-06-2008, 06:46 PM
So far it hasn't been a problem for me. My accounting isn't too complex. I don't look forward to it, but I have some billing management software that records my revenue as long as I keep it up to date and my bank accounts will show my expenses.

I'm looking forward to the day when my accounting does get complicated enough to require hiring an accountant since I would hope that means more money coming in.

Evan
08-06-2008, 07:55 PM
I'm looking forward to the day when my accounting does get complicated enough to require hiring an accountant since I would hope that means more money coming in.

Accounting isn't too complex, but often small business owners don't understand the basic principles. Accounting requires TWO accounts to be affected. You cannot expense your personal expenses through the business. You do need to have receipts to prove your expenses, and further, need to prove that it is for business use.

Should the IRS ever audit you, it's not an "innocent until proven guilty" matter. The IRS agent doesn't have the burden of disproving your deduction was for personal use based on a suspicion it is. It's you, as the business owner, that needs to show that the expense is for business use and that it's normal for the business you're in. If you do website development, a normal business expense would not be landscaping.

vangogh
08-06-2008, 07:57 PM
That's a good point. I set up a separate business account when I first opened for business so I could keep things separate. I think for most of us the hard part is keeping track of things and understand tax forms.

Evan
08-06-2008, 10:16 PM
That's a good point. I set up a separate business account when I first opened for business so I could keep things separate. I think for most of us the hard part is keeping track of things and understand tax forms.

That is often the base of issues. When you start a new business, it's records SHOULD be different than your personal records. Even if you're a sole proprietorship, it shows good record keeping to maintain a seperate checking account.

If you're an LLC or corporation, than you really must maintain a seperate checking account because you have another legal entity. Failure to do that can actually result in your loss of liability protection, which is often one of the biggest reason people organize (LLC) or incorporate. That is the last thing you'll want to find out if you ever get sued!

orion_joel
08-07-2008, 01:14 AM
Personally i have maintained as my own accountant, for the majority of my business dealings, however i have found it quite useful to pay the fee needed to have a qualified accountant lodge my taxes annually, with the Tax department.

It means that while i can keep the records how i like, my accountant has helped put some good habits into place that make it a lot easier for me to prepare the information for her to lodge the taxes each year, and in reality it now takes me less time to do the accounting i need to anyway.

Before i start i did have a little exposure to a few businesses so i had some idea where to start, with registering for tax numbers and keeping separate accounts and such, however there were things that i did not understand the real difference and the affect that it may have (eg the difference between cash based and accrual based accounting), which were things my accountant helped me with.

In the current state of my business the accounting fees a year may be more then i should be spending however, at the end of the day they are a deductible expenses, and it also gives me a longer time to prepare and lodge my taxes.

MamaYard
01-06-2016, 10:05 PM
I agree with Joel Brown. Well begun is half done. Wise to establish working relationship with accountant from the start of business. Good accountant makes it easier to grow your business. Most businesses fail because they are caught in poor practices.