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Accounting: Record Keeping 101
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Bookkeeping Basics: Boring with Benefits

Entrepreneurs, by nature, are charged up and enthusiastic about running their businesses. Perhaps the last thing they want to think about is recordkeeping. How boring! Yet, how important! It is a must to keep good books and records. Tracking your revenue as well as your expenses lets you know whether you’re making or losing money. It enables you to prepare financial statements that may be needed for loan applications or other reasons, and recordkeeping is required for tax return preparation. Here’s what you need to keep in mind:

Decide how you’ll keep records.
Today most small business owners use software or online accounting solutions for recording income and expenses. There are many easy-to-use no- or low-cost options.

Retain receipts.
You’ll need to keep receipts, invoices, canceled checks and other paperwork to support tax deductions claimed on your return (the IRS provides guidance on record keeping in Publication 583. Whether you use expandable folders or scan paper receipts into your computer, make sure your system protects the records and allows for easy retrieval.

Set up a separate business bank account.
Don’t co-mingle your personal affairs with your business finances; you’ll complicate your record keeping and probably miss out on tax deduction opportunities. Also, it’s a good idea to obtain a credit card used solely for your business.

You’ll want your recordkeeping tasks to become routine. Setting aside time on a regular basis to record your income and expenses will help establish good recordkeeping habits. Or you may want someone to do this for you (an employee or an outside bookkeeper/accountant).

Barbara Weltman, Guest Blogger
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Manage: Outsourcing for Efficiency
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Save Time & Resources

In these economic times, resources are limited in many businesses today which make outsourcing an option to get a project or task done with a fixed cost.

The following options can be considered.

  • A  small company can consider partnering with a larger company by providing their expertise as a subcontractor. This can be done by registering with the state and bidding on state contracts. In most states there is a department of administrative services that helps a business who has been in business for 2 or more years. In Connecticut, www.das.gov and www.sba.gov offer matchmaking events where small businesses are introduced to larger businesses for tasks that they need help with. Many larger companies use smaller companies to subcontract work to.
  • It is also possible to find companies who can produce, fulfill and ship products to buyers which allow design and marketing to stay in house. This is a process where a manufacturer will drop ship merchandise and stock inventory for a fee. If a service business needs help…temporary help is an option. Part time help makes sense in busy times and in slow times you are not locked into a fixed payroll.
  • Outsourcing human resources and management tasks that are labor intensive and costly makes sense. Payroll is very common and ends up being more cost effective than hiring an accounting firm or hiring a full time employee.
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When things can be outsourced it allows the company to focus on its customers and sales. Look into the options that make sense for your business.

Share ideas that have worked for you to make your business run more efficiently.

Julie Brander, New Haven SCORE
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Julie Brander - Business Mentor, SCORE New Haven
Julie has been a SCORE volunteer since 1997. She has 20 years of experience in business, starting a manufacturing, wholesale and retail jewelry company. After selling her business, she dedicated herself to helping other entrepreneurs start and expand their business.
www.scorenewhaven.com | @juliebrander | More from Julie

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