Bookkeeping

Why is bookkeeping important?
We could tell you it is important to keep good books because it lets you know the financial health of your business or because it makes getting loans easier, saves you money on tax preparation or because keeping good books protects you from overcharges or getting ripped off...but the main reason you should keep good books is because IT IS THE LAW. That is right, the IRS requires you to use a recordkeeping system that "clearly shows your income and expenses." IRS Pub.583

What kind of records are you required to keep?
The law generally leaves it up to you to determine the kinds of records you need to keep. The IRS says the recordkeeping system should include a summary of your business transactions and that if you have multiple businesses, a separate set of books needs to be maintained for each. They want you to "clearly" show your income and expenses.

Most accountants suggest a simple Profit & Loss Statement (Income and Expenses) and a Balance Sheet (Assets & Liabilities) to meet this burden.

BOSS can handle these for your business for as little as $49.95 per month. This is called our BOSS Books Services. Click here to learn more...

What kind of supporting documents am I required to keep for my business?
Supporting documents or source documents are required to back up your claims for certain expenses and for your income. The main categories that need supporting documents include your Gross Income, Purchases and Expenses. Canceled checks, credit card receipts, invoices, petty cash slips, receipt books, bank statements and deposit slips are all examples of supporting documents. If you plan on writing off mileage for business use of an auto, be prepared to keep a mileage log.

Does the type of business I operate change the recordkeeping requirement?
Yes and no. While all businesses must keep books and records, some businesses are required to keep additional records as well. This varies on a case by case basis depending on the specific set of circumstances. For example, if you are a real estate professional and are claiming the same on a tax return, there are hourly requirements that must be met to claim certain deductions. This will require a different type of supporting documentation.

Do not worry, BOSS has team of business accountants and bookkeepers to help. When you sign up for BOSS Books, the first step we take is to determine the nature of the business, the type of bookkeeping system to use and what supporting documentation will be required.

Call us today or click here to learn more.