Everybody wants to save time and money.
Here are some helpful year-end accounting tips that small businesses often forget:
Keep business and personal activity separate. It’s always recommended to have bank accounts and credit cards strictly for business purposes only. Co-mingling business and personal funds will only delay the filing your tax return.
Remember to review all your reconciling items including outstanding checks on your year-end bank reconciliation. You may have old outstanding checks that have never cleared and should probably be voided.
If you have a bank or car loan, apply the loan principal payments against the balance on your balance sheet. Only the interest portion of the payment should be recorded as an expense in the income statement.
If you purchase any capital assets such as equipment or furniture, avoid classifying the item as an expense. All capital assets must be added to the balance sheet and depreciated.