If you work from home and need to be sure that you are taking good care of your accounting and bookkeeping needs, there are a variety of practices that you can follow. You will need to manage the way that you take care of your money, records and planning, so that you are able to keep your business afloat. With this in mind, pinpoint the information laid out below and use it take great care of your bookkeeping needs.
Map Out The Big Expenditures
There is an old adage that says if you fail to plan, then plan to fail. In no other situation is this true than in the finances of your business. To keep your bookkeeping in order, you need to plan for a five-year span and not just this year. In terms of a year-to-year basis, you should also plan for the many ups and downs of the season. As an entrepreneur, many people would rather just focus on their work at hand and hope that their finances go into cruise control. This cannot be the case, because the market will change in a work-from-home business just like it will any other business. Map out these potential obstacles ahead of time, so that you are not caught off guard.
Create Monthly Invoices
Even though you are your only employee, you need to treat your business as though you are the human resources department, accounting department and more. This means that you need to come up with financial statements at the end of every single month that detail your budget versus your expenditures. This will be incredibly important and will allow you to correct any changes going into the next month. Keep track of these monthly financial statements by cataloging them and comparing them on a regular basis.
Catalog Your Records
Record-keeping is the backbone of your bookkeeping needs as a work-from-home business. In addition to investing in a quality physical filing cabinet, you should have a cloud subscription that allows you to backup all documents from your hard drive. Top it off by using a high quality scanner to make digital records of all receipts and other physical paperwork. By compiling both hard copy and digital versions of such records, you will always be in a good position to know where your business stands.
Pay Estimated Taxes
One of the most sensible things you can do from a tax point of view is to pay estimated taxes for your business. This way, you are always giving the IRS its due without falling behind. With estimated taxes, you will have payments due in January, April, June and September. This also helps you to avoid a late payment penalty that many self-employed people and of entering by putting off the taxes.
Keep these valuable tips handy and do not hesitate to get in touch with a bookkeeping services company for further assistance.