3 Do-It-Yourself Pitfalls To Avoid If You Keep Your Own Books

No small business owner – even those who proudly claim the title “solopreneur” – can manage every task alone.

In fact, smart, successful business owners know that trying to do it all yourself will quickly lead to overwhelm and a bad case of burnout.

Still, you need to weigh the benefits of hiring outside help against the cost – not only in dollars, but in your time and frustration level as well.

Hiring an accountant or bookkeeper is no different. Sure, you can probably do your own taxes and manage your own books, but is it worth the time? Maybe not.

The Differences Between a Bookkeeper and an Accountant

Simply put, a bookkeeper keeps the books.

He or she manages your income and expense records, most often using a software such as Quickbooks to ensure all receipts are properly filed so that when it’s time to calculate profit and loss and quarterly or year-end taxes, all the information is available.

Note from author:  I use the 2012 Pro version of Quickbooks. There is a bit of a learning curve but you don’t have to use all of the features to get the job done. Drop me a note if you have questions about how I am setup as a solopreneur.

An accountant, on the other hand, takes this information and uses it to determine how much you owe in taxes and when, and to offer advice on potential tax savings.

He or she will help you decide if it’s better to claim your new computer as an expense, or to depreciate it over several years.

Your accountant’s job is to ensure you are taking advantage of all the tax benefits available to you, while avoiding the fees and penalties that can occur if you are incorrect in your calculations.

Your accountant can also help you set up a basic bookkeeping system that you can manage yourself, allowing you to avoid having to hire a bookkeeper for the job. You will find that once setup, you are good to go.

Do-It-Yourself Pitfalls to Avoid

Keeping your own books doesn’t have to be difficult, but there are a few things you need to keep in mind before you make the commitment to do so.

First Pitfall

If you’re not organized or disciplined about it, you’ll be better off letting someone else handle the task.There are organization tools on my Tools For Success page like the brand name Franklin Planners which I use to map out my activities. Great stuff! Combine this with the Shoeboxed system and you are 90% there.

Letting your receipts pile up all month (or year!) is a recipe for disaster. Much better to set aside an hour or so each week to keep everything organized.

I use the Shoeboxed service for a monthly fee and trust me, it is well worth it. Shoeboxed is a very friendly company that mails me a postage free envelope in which I enclose my monthly receipts and mail back to them. 

They categorize my receipts and scan into their database so I can view online and re-categorize if necessary. Once you categorize your receipts online a few times , they pickup on the system and it moves toward being automatic.

Come tax time, you have all your records in an acceptable format (with totals, sub-totals-whatever you desire) ready for the accountant. Given my experience, I do my own taxes and can say that this process saves me hours.

Remember,  organization a critical step unless you are feeling charitable and want to give more than your fair share to the tax man. Also being organized is a lot less stressful, and you’ll have a lot less risk of missing something important.

Second Pitfall

You need to be sure you fully understand how income and expenses should be classified within your accounting system.

If you’re recording a business expense, is it rent, or office supplies, or capital equipment?

Incorrect categorization can cause trouble at tax time, and end up costing you more at the accountant’s office. When in doubt, give your CPA a call and ask.

Third Pitfall

Don’t make the mistake of trying to handle your own tax returns and quarterly tax payments.

Your accountant is up-to-date on the latest changes to the tax code, and you are not, so unless you want to devote a lot of time to learning to be a CPA, you’re better off paying him for his expertise.

So do you have to have a bookkeeper and an accountant if you’re just starting out?

Not necessarily. If you’re earning a few hundred dollars as a sole proprietor and don’t want the hassle of deducting your expenses, you can simply include your business income in your personal tax return and call it good.

But once your business grows to the point that it’s earning a significant income, and you’re looking at different business structures like LLCs and corporations, it’s time to get serious about your accounting practices.

The money you spend on a good accountant and bookkeeper will be recouped many times over in time – and maybe even taxes – saved.

When you get to the point of needing an accountant or bookkeeper or both, be sure to check out our friends at Elevation Tax  for a free consultation.

And don’t leave without checking out the article on Taxes and Budget Planning  for more tips for your success.

 

To your success!

 

FJ

p.s. leave your comments below and let me know what content you’d like to see.

Also make sure you sign up for additional blog posts to keep you abreast of business essentials as well as opportunities to save money! 

 

4 Key Ways To Keep Visitors Coming To Your Blog Site

 

Blogging is a perfect way for people to share their thoughts with others. When people blog, it means they keep an updated online journal or diary. Weblog and blog are the same things.

Companies might also blog to help increase the amount of business on their web sites. For many bloggers, increasing traffic to their blogs is not the only goal. Most people that blog want to keep their visitors coming back for more.

Blogging is a relatively new phenomenon. Some blog writers choose to keep their blogs personal and do not share their thoughts with others. These are more like online diaries. Other wants to share with everyone what he or she has to say. Blogging is a big business and many websites offer free blog hosting. In addition, many companies choose blogging as an inexpensive way to advertise their products or services.

Blogging on the Internet is often much cheaper than maintaining a web site and is usually more interesting for readers and clients.

The following are 4 ways to keep visitors coming to your blog site.

Update your blog: 

Be loyal to your readers and your readers will be loyal to your blog. Also, there are literally thousands of blogs available on the Internet. If your blog is not updated on a regular basis, you will loose your readers to another blog site. Another fun way to update your blog and keep your readers interested in your site is to include something fun for your readers to enjoy. That could be as simple as a joke or maybe a link to a humorous story you have found on the Internet.

You might also try including a trivia game or polls for your readers to enjoy on a regular basis.

Participate in web communities: Participating in web communities or discussion forums and mentioning your blog whenever possible will help keep readers coming back to your site. In addition, you can gain new readers when doing this. You can also be loyal to the blogs of other writers and ask them to visit your site.

Leave nice comments about their site and invite them to your site. If you have mutual interests and the same type of readers, you can even share your blog links on your site. This helps everyone.

Your reader will appreciate interesting reading while you benefit from readers from the other site.

Understand who reads your blogs: Another great way to keep blog readers coming back for more is to understand who reads your blog and write content that is directed towards them.

This does not mean that you have to write on only one particular subject, though. If you are a stay at home mom and write about your life at home with the kids, your loyal readers may not appreciate it if you write about cutting edge topics or use a lot of foul language in your writing.

If you generally write humor, do not bog your readers down with sorrowful woes and tales. Your readers will be interested in the things that attracted them to your site in the first place. That is usually what you are more interested in writing about.

You can gain a better understanding of your readers interested by including places for comments and encouraging your readers to contact you by email.

Include keywords: You can gain readership and help keep your current readers by including certain keywords in your blog. If you have entered your blog on a search engine, these keywords that point to your blog will come up after a search.

This is a great way to get readers interested in your blog. This is also a good way for companies to increase the traffic to their blog.

Blogging is the new way to keep a diary or journal online.

Blogging is increasingly popular for companies as well.

If you want to make your blog stand out against the thousands of other blogs, keep your readers interested and coming back for more everyday by updating your writing, participate in online communities, understand your readers and include keywords.

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Finally, if you are just starting out and wondering about this wonderful life of internet work, check out some of the jobs you can do on the internet at our sister page:

 http://www.powerfulhomeofficetips.com/internet-jobs-you-can-do-anywhere/

 

To your success!

 

FJ

P.S. Join our team now to get all the latest hacks on blogging. Learn about the amazing Kalatu blogging platform by clicking below!