Commit to clean bookkeeping from day one
Year-round, effective bookkeeping is the best way new construction business owners can minimize tax season stress. With the full range of accounting software out there, there's no reason to rely on time-consuming manual methods that leave room for error.
Tracking sales and income;
Creating and sending invoices and
With your financial records all in one place and up-to-date, you're better positioned to maximize your refund, while avoiding penalties associated with incorrect or incomplete tax returns.
Capture every business expense
Each year, some small business owners claim less than half of their business expenses, primarily because they don't have a reliable system for documenting expenditures while on the go.
Without carefully logged receipts, contractors must forfeit valuable tax deductions, sacrificing cash they could be funneling back into their business.
Cash in on claimable expenses by using a mobile app to record receipt data, track mileage, and generate expense reports. As a bonus, many of these tools sync with your all-in-one accounting software.
Separate business from personal
Right from day one, small business owners should divide their personal and business expenses. Differentiating between the two will make it much easier to claim deductions on your tax return – and support those claims in case of an audit.
Recommended steps to separate your business and personal finances include:
Create a separate bank account for your business, and designate a credit card solely for business purposes (this will help you track expenditures while building up your credit and borrowing power);
Never combine business and personal expenses (for example, if you buy printer ink for your home and your business at the same time, ask for two separate receipts);
Pay yourself a set salary from your business checking account each month (this will help you determine how your income and the company will be taxed).
Always consult with an accountant
Not sure exactly what you can claim as a business expense? Wondering which accounting software to use or how to interpret local tax regulations?
Consult with a construction accounting professional to put your mind at ease – well before the filing deadline! In addition to managing the nuts and bolts of tax preparation, regular meetings with an accountant will help you continuously improve bookkeeping practices and better understand the financial workings of your construction business.
Putting receipts inside QuickBooks is easy! Putting them in the right account, so the reports are accurate, the business owner can trust them, and when the taxes are filed, you will pay the least amount possible - that is where the professional bookkeeper earns their money.
About The Author:
Sharie DeHart, QPA is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on how to manage the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or email@example.com
Access Code: FEAHEROS
Simply scan the QR code or search for ‘MyAccountants’ in the App Store and enter the Access code: FEAHEROS to utilize the powerful App features and capabilities, and benefit from having our Construction Accounting App at your fingertips, 24/7."
PS: Even if you are not a Construction Contractor you will find a plenty of benefits in the app so we invite you to download it too! It's Free so why not?