Tips for Small Businesses, Investors and the Self-Employed

Run your business like a business. And, don’t over complicate it.

 

When do you need to use a bookkeeping software?

             You must have a Profit & Loss and Balance Sheet for your company from day one. You can’t run a business via a spreadsheet.

             (See below … When To Hire A Bookkeeper)

 

Do not use your social security number. Use an EIN.

 

Do not comingle your personal funds with company funds. Ever. (An LLC, for example, is a disregarded entity for tax purposes only. It is not disregarded as a company.)

 

Vendors:

 

          There is no need to have to “pay your vendors fast.” You run your company. You pay approved and vetted vendors per

          your company policies.

          Do not pay a vendor unless you have their W-9. Do not accept a W-9 unless it is legible and signed and dated. Do not accept

          an older version of a W-9. All companies should provide their customers with the most current version of a W-9 (www.irs.gov).

          Pay your vendors with business to business transactions. Do not use third party processors like Venmo, PayPal, etc. even

          though some do have or are working on business platforms. (Would Home Depot pay a vendor using one of these services?

          Would they refund money to a shopper using one of these services?)

 

Do not use a personal bank account for your company. The bank account statement should have your company name on it.

 

Do not use a personal credit card for your company. The credit card statement should have your company name on it.

 

Using your personal home equity loan to fund your company? Do not deposit funds from your personal HELOC directly into your company. Do not “pay back” your personal HELOC from your company bank account. Money should pass through your personal bank account.

 

Taking a draw from your company? Is there profit on your profit and loss statement? If not, there is no money to “draw.”

 

When to hire a bookkeeper:

          Need help doing your books? See Workshops on the Main Menu.

          You need a bookkeeper, if you are too busy to do your books.

          You need a bookkeeper, if you dread doing your books (and therefore, aren’t doing them).

          You hire a bookkeeper so you have time to run your business.

www.dmbookkeeping.net

www.debbiemullins-realtor.com

www.bark4dogs.org