Small business owners usually know that they need to hang onto all of their receipts, invoices, and billing statements, but they don't usually maintain organized records. Whether you are operating an S-corp or have a less complex business entity, accurate records must be kept. Businesses can end up owing a hefty sum if they don't estimate their quarterly state tax payments correctly, and there are many times fines that become applicable as a result of these kinds of oversights. Small business accounting can be consist of creating and updating detailed spreadsheets or hiring a professional business accountant. Just make sure that all of your small business accounting records remain up to date and accurately reflect your company cash flow.
Recording All Accounts Receivable
Not all small business owners work within industries that enable them to be paid in advance. Some businesses have to wait months before they are able to collect payment for goods and services that they have provided. Even if your current cash flow looks positive, you should record all small business accounting activities in real time so that you know when to anticipate your next payments. Knowing which customers have outstanding invoices can also allow your business to issue a gentle reminder at the most appropriate times. Recording your accounts receivable accurately will make paying quarterly state taxes a breeze and also help you to finish filing your federal tax return at the beginning of tax season.
Avoid Needing to File for State and Federal Business Tax Extensions
Delaying filing your business taxes on a federal and state level will give you more time to get your obligations in order, but relaxed time constraints seldom do anything positive for those who are chronically disorganized. You may keep an eye on the calendar and assume that you still have plenty of time to get your small business accounting affairs resolved until you realize that there are only a few days remaining before the deadline. By that point it can be hard to find a skilled small business accounting professional to prepare your tax returns, and if you owe money you could still be accruing interest.
You won't need to request a tax extension if you record all of your earnings and know what your federal and state tax rates are. Simply use business tax filing preparation software to punch in the numbers if you are sure that your records are accurate. To almost completely wipe out the chance of having your business tax return rejected or audited turn to small business accounting firms that offer tax preparation services. For more information, contact companies like Don Lamb CPA Inc P.S.Share