3 Common Mistakes Small Businesses Make: Mistake #1
Managing your finances is an integral part of your business, whether it’s a large corporation or a one person operation. The future of your business depends on bookkeeping accuracy. Errors here can cost you significantly and unfortunately occur more often than you would think.
We have identified three common financial mistakes among small business owners and will cover the first one in this blog.
Not saving receipts for purchases.
Receipts are your documentation that you will need as proof for tax deductions you can claim. If you are ever audited, you will need every bit of evidence you have saved. Without a receipt or other proof, your deduction is likely to be disallowed. Request itemized receipts when making a multi-item purchase so you can be sure and deduct the proper amounts. If you make a cash purchase, insist on a written receipt detailing all that was purchased. Checks you write should reference the purchase in the memo line. Receipts, invoices and check stubs should be maintained in a file for the entire year to be used when filing your taxes. It’s a good idea to scan these items so you can easily reference them electronically. Some receipts tend to fade over time making them virtually unreadable and a scan will ensure you will have the information captured.