Business Finance Articles

Many companies hold petty cash as a convenient means for making small purchases. The money is also used to reimburse employees for office items they buy. Unfortunately, petty cash is prone to accounting errors. One of the problems is failure to accurately record expenses paid with petty cash. The money is an asset just like [...]

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There’s more to the financial operations of a business than tracking revenue and expenses. The balance sheet shows what happened to the profit or loss and reveals the overall condition of a business. By examining the balance sheet you see the assets acquired with your profits as well as debt you incurred to buy those [...]

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An S corporation is taxed differently than an unincorporated proprietorship because the S corporation doesn’t incur self-employment tax. This is the tax on a proprietor’s profit that substitutes for payroll taxes covering Social Security and Medicare. Shareholders of an S corporation pay only regular income tax on their respective shares of business profit – regardless [...]

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Businesses can avoid trouble with mileage expenses by following a few simple rules. For starters, businesses can deduct mileage expenses only when certain standards are followed. The same requirements apply to self-employed individuals deducting business mileage, and companies that reimburse employees for business miles. Adequate records are required for business mileage deduction. They must document [...]

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Correspondence from the Internal Revenue Service (IRS) can produce a fright in the recipient, but there’s usually no cause for alarm. The most frequent letter sent by the IRS is the CP2000 notice. Its purpose is simply to convey proposed changes to a tax return. A typical trigger for this is math errors on your [...]

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Efficiently organizing the information needed to prepare your income tax return is more than just a courtesy to your accountant. Better organization permits your accountant to prepare the tax return faster and minimizes your cost. More important, anyone involved in preparing your tax return is required by law to understand information you supply about income [...]

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Proper management of bookkeeping information not only improves accuracy but also saves time and money. This is true if you perform your own business bookkeeping or hire a bookkeeper. Don’t expect all the responsibility for efficiency to rest completely with your bookkeeper. If you do your own bookkeeping, you already know that a stop-and-go process [...]

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Using petty cash is a convenient way to make small purchases or reimbursements, but it is prone to accounting errors. Rules for the Cash Establishing a petty cash fund does not mean that the money in the pot is an expense. Rather, the cash is an asset just like a bank account and thus must [...]

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Did you know that you may be able to deduct a portion of your home for business use – even if your business has a different primary location? To claim a business deduction for your home there must be an area used exclusively and regularly for business. When the area is not your principal place [...]

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It seems that many business owners could be wasting money because of bookkeeping errors relating to payroll. The thing is that taxes you pay that are associated with payroll are not your payroll tax expense, and if your bookkeeping records show that they are, your accountant has to fix the error. That’s not an easy [...]

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