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August 22, 2007

Success Is In The Details (Part 2): Accounting

Imagine the small business owner spending a gray winter day hunched over a desk with a shoe box full of receipts. This scenario is all too common and often results in small business owners not taking deductions that they deserve because they have forgotten small purchases made with petty cash. Do you remember buying two cent stamps when the postal rates went up? How much did you spend on the condolence card for the client whose mother passed away? Don't forget to deduct that gallon of bleach you bought with your household money while you did your grocery shopping because it was convenient and you were running out.

Paperwork is a necessary evil if you own your own business. In fact, it may be the most important part of your practice because it helps you keep track of the financial health of your business. Keeping up with expenditures will make you aware of spending habits and allow you to keep track of unhealthy patterns so you can tighten your belt.

An accountant friend gave me an invaluable piece of advice before I opened my own business. Keep up with your paperwork. If you're not the greatest at keeping up with paperwork, set aside an hour of uninterrupted time to log in expenses, gift certificate sales and income every month. This way you won't be overwhelmed with accounting paperwork at the end of the year.

If you have no idea where to start keeping track of your paperwork, H&R Block has free workbooks that you can use to log your expenses in an organized way. The categories should match with the deduction categories on a tax return. If you have questions about legal deductions, the investment that you make in hiring an accountant will be well worth it. Getting audited is not only nerve wracking but extremely time consuming.

Tomorrow I will be talking another mundane massage responsibility: laundry. Keeping up with the burden of laundry and having sheets that smell fresh and clean removes the worry about this important detail that your clients will notice.

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Posted by linda at August 22, 2007 6:58 AM

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