Running a business is hard, anyone can acknowledge that.  Today, one of the biggest downfalls of any company is its bookkeeping. Simple mistakes and errors can not only make the running of the business difficult but it can also be its downfall. Try and avoid these easy bookkeeping mistakes to make your business run smoothly.

Bookkeeping is something that all businesses, big or small, have to do. The pen to paper bookkeeping for many is a thing of the past thanks to amazing online programs and applications, like Quickbooks, that do a lot of the hard work for you. For some, making and keeping a note of everything by pen and paper is still preferred. But your bookkeeping and how you handle it is just as uniquely personal as your business model and strategy. But the biggest factor, however you decide to do your bookkeeping, is to avoid some of the most simple and common mistakes out there. Today we will be discussing how to avoid these common mistakes to keep your small business working smoothly no matter what!

The First Steps
When it comes to the point where your small business can grow and expand, that is so exciting! But it's so easy to overlook the important steps of your full bookkeeping to successfully make those steps. Many new business owners will just do the bookkeeping themselves. They rush the process, they don't account enough time or attention to the process, and completely mess up a good chunk of all of it by doing so. Our first recommendation is to work with a professional. If you don't want one full time or on staff, at least learn from them how to properly do everything that needs to be done. Take more classes, attend seminars, or even bend the ear of professional bookkeepers. Or hire someone like us at Hoods, who can help you understand Quickbooks and how to properly use it for your company! Most importantly when you sit down to do your bookkeeping, take your time and breathe.

Budget Time
This might be obvious, but it still needs to be said. You have to budget for your small business or the outcome could be a disaster! You raised and created the fund to create the company in the first place. So you know that your bank account doesn't have unlimited spending for the year or years to come. You need to plan how the money of the company will be spent, or in other words, what will your budget be. A budget will help you track your accounts and records, any issues can be corrected quickly, you can plan for any emergencies, keep the company running, and pay your employees. In 2018 alone, 61% of small businesses didn't create a budget. How scary is that? A lot of young companies don't have a full appreciation of what a budget can do for the company itself. Without one there is no way to evaluate the performance or even the goals for the company. You also can't continue to develop the business without one, and you can't see any growth either.

The Paperwork
One of the most important steps in bookkeeping is the reconciliation of your books. This is making sure all of the bank accounts, credit cards, and all the reports match and you have proof to show that they do. This is a huge step when it comes to paying your taxes based on how much the company made, how much was spent, and how much was paid to the employees. These factors will all factor in how much you owe the IRS come tax season. Not doing this properly can lead to over or underpaying your taxes. This might have you re-doing your taxes, owing more, and possibly accruing late fees. Not to mention the hours spent on the phone and in front of your computer to fix these issues. You can also become a victim of fraud, have bank withdrawals that were not authorized, several other bank errors, and the disappearance of money you can't account for.

It Doesn't Mix
Many small businesses start in garages or home offices. Some of the greatest companies of all time have started this way. But don't make the mistake of mixing your home and business bills, expenses, or taxes. Make sure you know exactly how to write off business expense items and what they are before doing so. The IRS is very well versed in what you can and cannot call business expenses from your home, so don't try and fool them. Even if you make an honest mistake, it can still hurt you come tax time. Separate your credit cards, your living space from your workspace, your landlines, and cell phones. Keep meticulous records of expenses and receipts, mileage, and time. Don't muddy or blur the lines between home expenses and business expenses. This will make your life and dealing with the IRS much simpler!

There are a lot of small moving parts to bookkeeping, but all of them have to be well oiled to keep the machine running. Don't rush, make sure you know what you're doing, and never be afraid to ask for help. We are here to offer you the best tax services for your business and to help you do your bookkeeping with Quickbooks. Don't let your small business become prey to these easy mistakes. Take the time to educate yourself and keep your bookkeeping focused and accounted for.

For new business owners and sole proprietors, it's so easy to forget or not even known about all of the best deductibles and write-offs for your future tax season. So here are some of the best tips and hints and what you can look forward to writing off come April 15th!

April 15th. It's a day that goes down in infamy once you're proudly bringing home your first paycheck or have opened your own business or have become a sole proprietor. Even though it's still 9 months away from when we all have to open our wallets for Uncle Sam, taxes don't have to be as painful or as costly to you or your business as you think. We get it - taxes aren't your favorite thing. So to ease the pain between now and April 15 let's talk about something a little less painful - your tax write-offs and deductibles!

Those glorious write-offs can cut your taxable income and cut down on what you end up paying for your taxes come tax season. But are you writing off everything that you can? Do you know just how much you can track and write off every year to make sure you're getting the financial break you and your company deserves? Let's break down what exactly you can write off - and how you should be keeping track. Federal tax laws can be a bother and can get in the way of what you think you can write off and what you actually can. Tax code and Tax law does change a little every year, so there are loopholes and certain things that will affect how, how much, and when you can write off certain things. When tax season does come around, make sure you, your tax advisor, or your Quickbooks extraordinaire takes the time to research the new tax code for the year. This list covers the big write-offs - and a handful of others that you might not know about. A lot of the time the more unknown or forgotten write-offs can be some of the most lifesaving and profitable at the end of the day. Make sure you're keeping track - and reading the small print.

Our first recommendation is to keep track of everything for your company. Quickbooks is a simple and easy tool that can help you track all of your project probability, manage bills, track your mileage, keep track of your income and expenses, help you manage your invoicing and payments, manage your contractors, and of course - pay your workers. It's simple, efficient, and can take the headache out of tax time. You will also be a star employer if you get your taxes finished sooner than the cut off date. The faster you do, the faster that tax return can get back into your pockets and the pockets of your employees.  

The first general idea to keep in mind when you're just beginning and making plans of what you're going to be writing off this year, your write-offs HAVE to be something that is always used in your business industry. Once this is established, don't forget to keep and track your records. There are TONS of amazing apps and programs that can help you stay organized. Did I mention how amazing  Quickbooks is and how they can do all of that for you?

TOP WRITE OFFS FOR SMALL BUSINESSES!

• Equipment and Supplies: Any office equipment or supplies. This includes printers, computers, software, desks, paper, pens, and phones. This can also include cleaning supplies for a cleaning service and postage. You can also write off the rent or cost of any machinery or equipment you use for your company.
  • When writing off large ticket tangible items like tables, chairs, or vacuum, look into their depreciation values. Will it be better for your company to write off all of these big-ticket items now, or wait until later? If you don't depreciate them, they are treated as non-incidental materials and supplies (under a de minimis safe harbor). These items then become deductible when purchased or furnished to customers.
• Business Costs: This is the cost of doing business for the current fiscal year for services like attorneys, accountants, and consultants. This also includes your utilities; electricity, your mobile phone, and your second land line at your home (if you work from home). Ordinary repairs and maintenance of your building, office, or workspace. This also includes contract labor for freelancers and independent contractors.
  • Remember if your freelancers and independent contractors are making $600 or more from you, deliver the correct tax papers for them to fill out at the end of the year!
  • When writing off mobile phones - you can only write off the time you're using it STRICTLY for business.   
• Promotional Investments: All of your ordinary and common ways of advertising are fully deductible. This includes your business cards, phone book ads, sponsorship, Facebook ads, social media campaigns, and so on.
• Bad Debts: Surprising right? As long as the product that was sold as a tangible good NOT a service, bad debt from that fiscal year can be written off, as well as interest on business indebtedness. This also includes penalties or fines for late performance or nonperformance of a contract!
• Selected Taxes: This includes employment taxes, licenses, regulatory fees, taxes on real estate and personal property, employer taxes, the employer share of FICA, FUTA, and state unemployment taxes.
• Labor Costs: This includes employee compensation, wages, gifts, bonuses, and benefits such as health insurance and vacation pay. If your business helps with adoption assistance, and group team life insurance. This also includes commissions and taxable fringe benefits. You can also write off plan admission fees. This write-off also includes education assistance, dependent care assistance, and contributions to qualified retirement plans.
• Insurance: This write-off includes your business owners policy, malpractice coverage, flood insurance, cyber liability coverage, and business consultation insurance.
• The Office: You can write off the rent for the current year as long as the owners don't have and won't receive equity in a title to the space. You can also write off mortgage interest if you own realty.
  • If you work from home, you can still write off a part of your mortgage and the household expenses. BUT there are some important rules you need to follow. The space you choose must only be used for work and NOTHING else. To write of this space, measure the workplace you've chosen and divide that by the square footage of your home. The percentage you come up with is the amount of housing payment and utility cost you can deduct.
• Commission Fees: Fully deductible!
• Travel: If you travel for work, your transportation and lodging can be written off. Meals can be - but there is a limit to how much. If you're taking yourself out for a meal, this can't be written off. But if you're taking a client or employee out for a meal, 50% of that meal can be written off. You must substantiate the expense if you choose to do so.
• Car & Truck Expenses: The cost of operating any vehicle is only deductible if there are required records (receipts) to prove business usage. This practice can be eliminated if you rely on the IRS standard mileage rate of 58 cents per mile, instead of deducting your actual outlays. You can write off these expenses if you own the vehicle or you're leasing it.

EXTRA WRITE OFFS YOU MAY NOT KNOW ABOUT!

• Books, audiotapes, CDs, videotapes, software, and other similar items that grow your business skills.
• Bank Service Charges
• If you join a chamber of commerce and attend trade shows, you can write off dues and registration fees.
• Coffee and Beverages for your employees.
• Business Licenses
• Regulatory Costs
• Outplacement services for employees

How much did you know? Did you find anything surprising and helpful? I hope so! Hopefully, this has shone a light into some confusing or unknown waters that now makes more sense and will save you a few extra dollars this next tax season.

Next up: Things you think you can write off, but actually, you cant!

​Here are a list of questions to ensure you find a great accountant to fit your needs!

Accounting Facts 1: ComputerCompter ​
​was the original word of accounting. It was a derived from a French language. The meaning of compter is to count or score. The p letter on compter was dropped on the pronunciation and spelling of over the time.

Accounting Facts 2: record keeping
The people who were obsessed with record keeping were the ancient Romans. The military bases of roman always recorded the number of grains or even nails that they use and have in the workshops.

Accounting Facts 3: Luca Bartolomeo De Pacioli
​Luca Bartolomeo de Pacioli wrote the first book about double-entry accounting in 1494. He was an Italian mathematician and Franciscan friar.  This man is called as the father of modern accounting because of his book.

​Accounting Facts 4: 19th Certified Accountant
​In 1896, New York State issued the first certified public accountant exam.

Accounting Facts 5: FBI
The law enforcement cannot be separated from accounting. You may be surprised when you know that FBI   has 1,400 accountants as their special agents.

​Accounting Facts 6: Walter Dimer
​Walter Dimer was an accountant who invented a bubble gum in 1928.
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Accounting Facts 7: Al Capone
Some FBI accountants brought down Al Capone in 1931.  This Chicago crime boss was charged of income tax evasion even though many people believe that he was subjected to crime such as murder and bootlegging.

​Accounting Facts 8: celebrities
​There are various celebrities who began their career as an accountant. Some of them include WWE wrestler D-Lo Brown, Chuck “The Iceman” Liddell, comedian Bob Newhart and jazz artist Kenny G.​
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Accounting Facts 9: Accounting Study
Before their big time, there were some celebrities who studied accounting. Some of them include singer Jane Jackson, lead singer of Rolling Stones, Mick Jagger and author John Grisham.

​Accounting Facts 10: Academy Awards
​Accountants are needed in Academy Awards. Prior to the Oscar night, the accountants will spend their 1,700 hours to count the Academy Award ballots manually.

List made by http://www.myinterestingfacts.com/​