On this page:
Record keeping and bookkeeping are both important parts of your home business.
It's a good idea to take the time to do them so that you have sufficient
information to support your tax returns. Consult a qualified professional
for information specific to your business.
What We Mean by "Simple Bookkeeping":
- Keeping track of your expenses and income. By "bookkeeping", all we are
referring to is entering details about your expenses and income in a book, ledger,
or software program. "Bookkeeping" does not refer to tax preparation or anything
else of that nature.
- Consult an accountant or tax consultant. This is by no means a replacement
for the advice of a professional.
[Return to Top]
Why You Should Do Some Basic Bookkeeping:
- Keeping accurate records helps you monitor your progress. By keeping track
of your income vs. expenses each month, you can see how well your home based business
is doing. Is it growing, and by how much? Are you progressing towards a profit? If
you're already making a profit, are your profits increasing month after month? Are
your expenses under control?
- Your books will help you at tax time. Your accountant or tax consultant will
have your nicely organized and detailed records to work from. This is far better
than a huge jumble of receipts, scribbled notes, and so forth. It will also save
them time preparing your tax return (which in turn saves you money!).
- Your books will help if your home based business is audited.
Detailed records will help you account for all your expenses and income.
[Return to Top]
What Records Should You Keep?
You should keep all invoices, credit card receipts, deposit slips, vendor invoices,
cash register receipts, cancelled cheques, and so forth that will document:
- Sources of income for your business.
- Direct expenses which are costs directly related to creating your product or
service, such as materials.
- Overhead expenses. One example of an overhead expense is office supplies.
- Assets. You must keep good records documenting the property and equipment you
use in your home based business. This will support your depreciation claims on your
tax return.
[Return to Top]
Put together file folders, envelopes, or some other organization system that
lets you find your information quickly and easily. Store all of your receipts
and files for one tax year together in a box for easy retrieval.
[Return to Top]
| |
|
|
|
In this section:
Getting Started
Money Matters
Doing Business Online
Your Home Office
|
