Don’t Repeat These 4 Common Accounting Mistakes Everby Harley Green Accountant
Nearly 90% of the businesses in the US fall
into the category of small businesses according to the definition. Therefore,
small businesses may not be that small as the word implies. Small businesses
often face trouble related accounts as most of them are not fluent with the
accounts. An accountant West Los
Angeles mentioned that often these businesses made mistakes that cost
them during the tax file. These are some of the common mistakes that often
small businesses do. Here is a list of the mistakes that often the small
Cash flow is not profit
Often the businesses think that a higher
cash flow means a good profit. However, that is not true. Suppose you are
funding in your business and you are getting a lot of cash in return. But does
that mean it is making a profit? No, not at all. Unless the margin of the
investment and gain is increasing, you can’t claim it as profit. A good
accountant can point you out these things. Further, only a profit can be a sign
of a healthy company.
Not focusing on Bookkeeping
Often it has been seen among the small
business owners that they don’t take the bookkeeping business seriously. They
keep the expense receipts in the shoebox and later at the end of the year they
face a terrible problem. If you will not be able to point out the expenses
properly, you won’t be able to ask for the deduction at the time of tax
preparation. Bookkeeping helps to categorize the assets and liabilities. A good
West Los Angeles can also help you with bookkeeping.
Do you have contracted or employed?
Do you have employees to run the business?
wait a second. Do you have employees or you have hired people on contract? You
may think that it is insignificant but during the tax return, it may have a
serious impact on your business. If you are not sure about the differences
between a contract person and an employed person, then you must hire an
accountant who will help you to understand the difference, and save your tax
Managing All your accounts
Often small businesses try to manage the
accounting matters in-house. Therefore, the loopholes don’t come out in the
front. It is better to hire a third-party accountant for the work. They will
work in an unbiased way. When a third party will work on the accounts matter,
you will get a better picture of your business. It will help you to take the
necessary steps to manage the finance of the business and save a good amount of
tax as pointed out by an accountant
West Los Angeles.
Therefore, over here you have seen that how
the businesses do small mistakes for which they suffer a lot. Hiring an
accountant can solve all these problems easily.
Created on Jun 3rd 2020 02:03. Viewed 270 times.