Accounting & Bookkeeping

To review information extracted from a receipt, compare the digital record with the visible receipt before categorizing, matching, reimbursing, or reporting the expense. Check the vendor, transaction date, total, tax, currency, category, and relevant job or project. If receipt OCR reads a value incorrectly, correct the affected field when the image is clear. If the […]

To calculate retained earnings, add the current period’s net income to the beginning retained earnings balance, then subtract dividends or qualifying owner distributions recorded against retained earnings. Ending Retained Earnings = Beginning Retained Earnings + Net Income − Dividends or Distributions If the business reports a net loss, subtract the loss instead of adding net […]

Yes, digital receipts are generally acceptable business records for U.S. federal tax purposes when they are complete, accurate, legible, accessible and retained for the required period. A photograph, scanned copy, emailed receipt or downloaded PDF can support a business transaction. However, the file format alone does not make a record sufficient. The digital receipt should […]

To do bookkeeping for a small business, separate your business and personal finances, choose an accounting method, create a chart of accounts, record every transaction, retain supporting documents, reconcile your financial accounts, and review your financial statements regularly. That sounds straightforward. The difficulty is keeping the process consistent while you are also serving clients, managing […]

An LLC gives business owners flexibility, but that flexibility can make accounting and tax responsibilities difficult to understand. The right accounting process depends on how many members the LLC has, how it is classified for federal tax purposes and how the business operates. Regardless of its tax classification, every LLC needs consistent records, separate financial […]

You do not need to become an accountant to understand your business’s financial records. However, knowing common bookkeeping terms can help you communicate with financial professionals, read reports, organize transactions and make better-informed decisions. For a residential contractor, that could mean understanding the difference between revenue and profit, knowing how unpaid customer invoices affect accounts […]

Tracking business expenses does not have to mean spending hours entering information into a spreadsheet. A simple system can help you capture expenses when they occur, preserve the documents supporting them and understand where your business’s money is going. The details of that system will depend on how your business operates. A residential contractor may […]

If you’re like many small business owners, you may tend to keep many of the financial details of your business in your head or through handwritten notes. This could lead to a myriad of problems down the road, not the least of which is an IRS Tax audit. This blog provides some key bookkeeping tips for small business owners and entrepreneurs. 

If it were possible to call the Internal Revenue Service and ask for a discount on your tax bill, their phone lines would probably be jammed all day. Since that is not an option, smart independent contractors and small business owners focus on what is actually possible. They reduce their tax bill legally by understanding […]

Spreadsheets are like duct tape, useful for almost anything, but not meant to hold a business together forever. If you’re a solo entrepreneur or part of a 2- or 3-person team, spreadsheets probably carried you through your first year. They helped you track invoices, list expenses, and make sense of cash flow. But as your […]