What type of bookkeeping is necessary to maintain a business,
like many other questions, depends on the type of business. A large
corporation will probably need a team of CPA’s on staff, and even a
lawyer who specializes in tax matters. A small business though, an LLC,
S Corp, partnership or sole proprietorship has simpler needs.

The small businessman may do much of the bookkeeping himself, or
have it done by his administrative assistant using one of the many
popular bookkeeping software programs out today, or even templates
available for spreadsheets like Excel, Quattro and Lotus. The small
businessman really just needs to keep track of income that comes into
the business, money that goes out of the business, what it goes out
for.

Saving receipts and making notes in the checkbook ledger are two of
the most important parts of small business bookkeeping. You can only
claim a legitimate business expense, and therefore claim a deduction if
you have a receipt to prove it if challenged during an audit. Save all
receipts, no matter how small, because they all add up.

One of the most important reasons to have good, accurate bookkeeping
is tax time. Many business pay taxes on a quarterly basis, Some pay
annually. Either way, accurate records are demanded by the IRS, and are
the only way to limit your tax liability legally and to withstand an
audit if it ever happens.

While most small business owners prefer to have someone else handle
their taxes, and many prefer to delegate bookkeeping chores to an
employee, is essential that the business owner understand the process
of bookkeeping and the tax system. If your education didn’t include
bookkeeping and taxes, check the local community college and see what
they offer, and get an education in order to help yourself.

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