Top 5 Bookkeeping Tips
- Keep all your receipts
- Reconcile bank account regularly
- Follow up unpaid invoices
- Put money aside for tax
- Keep books up to date
On April 30, 2018, the California Supreme Court issued its long-awaited opinion in Dynamex Operations West, Inc. v. Superior Court, clarifying the standard for determining whether workers in California should be classified as employees or as independent contractors for purposes of the wage orders adopted by California’s Industrial Welfare Commission (“IWC”).
The Court held that there is a presumption that individuals are employees, and that an entity classifying an individual as an independent contractor bears the burden of establishing that such a classification is proper under the “ABC test” used in some other jurisdictions.
To meet this burden, the hiring entity must establish each of the following three factors, commonly known as the “ABC Test”:
(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and
(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
Fail just one part, and the worker is an employee under California wage and hour law. This new test is even stricter than most other states’ “ABC Tests”, which usually include two ways that Part B can be satisfied.
California employers will now need to reevaluate the way they treat independent contractors under the “ABC Test” to determine whether any or all such workers should be reclassified.
As soon as you start a business, you have to deal with numbers. Every business, no matter how small, must keep a record of its every transaction. That includes sales, expenses, salary payments – in fact every movement of money into and out of your business.
Although it’s possible to do this yourself, most entrepreneurs aren’t trained in bookkeeping. So it’s common for businesses to outsource this everyday work.
In this guide we’ll explain why hiring a bookkeeper is a great idea, or even an essential part of doing business. Then we’ll look at how you can hire the right bookkeeper for your business.
If you’re just starting out in business, you might think you don’t need someone to look after the books. Perhaps you feel that it’s enough to let your accountant sort out the numbers once a quarter or once a year. But there are good reasons for hiring a bookkeeper. Here are three of them:
Accurate bookkeeping is an essential component of small business success. While it may be a nuisance and feel like a chore, it’s vitally important you track your revenue and expenditures. Many businesses that could have earned great success have been bogged down by their failure to properly maintain their financial records. The IRS tells us 40 percent of small businesses incur an average penalty of $845 each year for late or inaccurate filings and payments.
Your business must provide information on a regular basis about its profits or losses to access the amount of tax dollars you owe. The information must be correct and presented in a manner that is professional and concise. Failure to stay current with your taxes can lead to severe repercussionsthe government can impose penalties and fines that could negatively impact your business.
Business owners can claim expenses that have been incurred as a business expense. These expenses need to be paid from the business bank account, and ideally submitted on a consistent basis such as one time each month. This ensures the person responsible for bookkeeping can better see and monitor outgoing cash for tax purposes.
Oftentimes businesses work hard at building a brand with a passion yet they fail to track cash flow. It is critical for a business to track its spending no matter its size and it is only possible with accurate financial records. Several growing and seemingly profitable businesses have failed because they were suddenly hit by a cash-flow crisis that was unexpected and they weren’t prepared.
Profitability and growth
To determine the amount of profit your business is making, accurate bookkeeping is essential. A few business owners neglect to track this, but it is vitally important. Bookkeeping allows a business owner to have a better grasp of how much progress they make from year to year.
2018 Business Tax Deadlines for 2017 Tax Filing
Your business’s tax return deadline is based on its entity type, whether or not you plan on filing an extension, and if there are any weekend or federal holidays in the picture.
The table below details when each type of business entity needs to file 2017 taxes in 2018 (using the calendar year)
|Entity Type Tax Deadline||Due Date|
|Original deadline for partnerships (Form 1065) and S Corporations (Form 1120S)||March 15, 2018|
|Original deadline for C Corporations (Form 1120) and individuals (Form 1040)||April 17, 2018|
|Original deadline for exempt organizations (Form 990)||May 15, 2018|
|Final deadline for partnerships and S Corporations (with extension)||September 17, 2018|
|Final deadline for C Corporations and individuals (with extension)||October 15, 2018|
|Final deadline for exempt organizations (with extension)||August 15, 2018|
Typically, the tax return due date for flow-through entities is the fifteenth day of the third month of the company’s fiscal year. So the S Corporation and LLC tax return due date in 2018 will fall on March 15 (for partnerships that follow the calendar year). The extended due date for flow-through taxes will be September 17, 2018.
Next post coming Soon.
The income statement reports a corporation’s net income for the period of time indicated in its heading. The income statement is also known as the statement of income, statement of earnings, statement of operations, profit and loss statement, or P&L.
Parts of an Income Statement:
Revenues. *Selling products (net sales),*Providing services (net service).
Cost of Goods Sold. Costs of goods made by the business include material, labor, and allocated overhead
Gross Profit. Gross profit is defined as net sales minus the cost of goods sold. This is important because the corporation’s gross profit amount must be sufficient to cover its selling, general and administrative expenses and to provide a sufficient amount of net income.
Expenses. Cost associated with main business activities. Example of expenses will include supplies, rent, advertising, commissions for employees and agents, interest.
Net Income. A corporation is required to issue annual financial statements, but it is common for a corporation to prepare monthly financial statements for its management.
At Alvarez Tax Services, LLC we can provide you with this service.