Business Finance Articles

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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As an employer, you are required by law to withhold money from employees’ pay and remit the amounts to various agencies. In addition, you have direct liability for certain taxes based on workers’ wages. The taxes that you’re required to withhold on behalf of workers and those that you must pay directly comprise your payroll [...]

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It’s important to find the right system to handle your bookkeeping, bill paying and accounting tasks. Depending on the size and complexity of your business, your needs may vary from simple bookkeeping and bill paying to a more full-featured accounting solution. To clarify your needs, identify the processes you undertake or expect to undertake in [...]

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There’s a principle in fraud prevention circles known as the 10-10-80 rule. According to the rule, 10% of employees will not steal under any circumstances, 10% will steal at any opportunity and 80% of employees will steal if they can rationalize the act. Small businesses are especially vulnerable to employee fraud and theft, and they [...]

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A profit and loss statement (P&L) summarizes your business’s revenues and expenses over a given period of time – usually a quarter or fiscal year. A basic P&L lists net revenue at the top, along with primary income sources such as delivering or producing goods, rendering services, or other activities that constitute ongoing operations. Income [...]

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