CHICAGO — Having a good, solid accounting and filing system at tax time and year-round is a cornerstone of a successful small business.
With that in mind, this month's Business of the Business from Tornado Industries, a leading manufacturer of professional cleaning equipment, offers the following tips for developing a smooth-running accounting system.
Keep everything. This includes all invoices, bills, bank statements, receipts, and tax documents. A tax adviser can tell you what you may need to keep permanently and what can be disposed of and when.
File. Having an effective, easy-to-use filing system for virtually everything related to your business is essential. Information can be stored electronically or on paper.
Have someone to call. In many cases, a small business can handle its own accounting and tax issues using various software programs. However, you should not hesitate to turn to an accounting/tax professional if you have questions. The software programs are only as good as the information given them.
Select an accounting software program. Most business owners are familiar with one popular software accounting program; however, there are others available that may work better for you. If you can, try the program before selecting.
Decide on cash or accrual accounting method. Most small businesses use a cash basis accounting system. With this system, income is recorded when it's received, and expenses are reported when they are actually paid. It is the simpler of the two. With the accrual method, transactions are counted when the order is made, items are delivered, or services are rendered, regardless of when the money for them is actually received or paid.
Keep personal and business records separate. A big mistake sole proprietors often make is co-mingling business and personal checking accounts. Always keep them separate, especially when it comes to tax time.
The Business of the Business Advisory is designed to help building service contractors operate their businesses more efficiently and profitably.
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Available For Interviews And Industry Commentary:
Tornado Industries President Michael Schaffer is available for interviews and industry commentary by calling (630) 818-1300
About Tornado a Tacony Company
Tornado Industries has been engineering quality cleaning equipment for more than 80 years. The company has a long history of developing innovative products and applying the latest technology to increase productivity, reduce costs, and improve safety. Tornado prides itself on always being on the cutting edge of cleaning solutions. Many of the company's products are manufactured in the United States with domestically and globally sourced parts.