Bookkeeping is a Must for Small Businesses

The title only includes small business because that is the focus of this post. However, bookkeeping is must for every business; irrespective of its size. Many small business owners avoid getting a professional bookkeeper for their business because plenty of other expenses are already cutting into the small profit margins. The expense of bookkeeping, however, will result in savings of both time and money for business owners. Since bookkeeping fee is a business expense, it is deductible from business income.

One key reason to hire a bookkeeper is to organize every business transaction. Yes, every transaction, whether few pennies or thousands, must be categorized into income and various expense categories. This tedious task is time consuming and small business owners do not have the time to organize every single transaction. And no, your banks are not categorizing the transactions into appropriate categories.

Taxes are another important reason why bookkeeping is essential. If your bookkeeper is doing his or her job, when the time is ripe to file taxes, your books should be ready, and expenses and deductions already well categorized. Apart from organization, bookkeepers can help you claim deductions that otherwise will go unnoticed. For example, I recently signed a client who was relying on receipts and business bank account to help claim deductions and expenses. Upon taking over the books, I realized the client failed to take over $60,000 worth of deductions in a tax year. These deductions would have resulted in a lower tax liability and greater profit margin. This is just one of many examples that I have recently encountered where small business owners are not claiming deductions.

At Singh Tax Services, all bookkeeping is organized and reviewed by a California licensed attorney. For a free bookkeeping consultation, please contact Singh Tax Services at (661) 599-8884 or email at singhtaxcenter@gmail.com.

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