Tracking All The Expenses Of Your At Home Business
It is imperative to keep accurate tracking of all the expenses concerning your home business. This means you will need to utilize the services of itemizing deductions. An accurate record keeping account will help make all the necessary claims and deductions your business will be entitled to, and help you be fully prepared in the event that the IRS audits you and your business.
It is important to record every type of expenditure that your business generates using a logbook. Anytime you receive any receipt you simply need to write the total amount along with what was purchased as a way to record exactly how your business operates.
Next, simply file away all of the record receipts using a simplified filing system. It might be filed by the month and the expense. This will help you easily locate any receipt when necessary at a later date, especially during an audit.
Next, it is imperative to transfer all of the recordings you have written down in your logbook into Quicken or an Excel spreadsheet at least once every month. This provides you the opportunity to have both a written copy of the receipt, along with an identical electronic copy. At first this may appear to be overkill, but will serve a valuable purpose. If there is any type of audit, from a bookkeeper, CPA, or the Internal Revenue Service, you will be thrilled that you took the time and energy to keep the most accurate and up-to-date records.
Many business people believe that because they run an at-home business they cannot take advantage of a mileage write off. However this is one of the crucial components to maintaining profits. It is imperative to keep track of all of the vehicle’s monthly mileage. This includes all the travel it took to operate or maintain the business. You can easily find a mileage booklet at an office supply store. In addition you can transfer all of the travel information into Quicken or an Excel spreadsheet as well.
You will also need to keep accurate records pertaining to all travel expenses. If you are traveling by train, plane, vehicle, or any other method, and stay overnight at a hotel you will need to save the receipts. In addition, you will need to save receipts for all food consumed at restaurants while on business. All expenditures can be written off while on travel.
When returning from a travel event, it will be time to file your receipts. You will maintain record expenses inside your logbook before entering them in Quicken or on an Excel spreadsheet. This system of recording three times will help minimize any problems during an audit.
Keeping accurate records is an easy way to generate the greatest profits in an at-home business. With the available computer software the process has been minimized. This allows you to spend more time generating new sales, finding new prospects, and creating new items or products to offer your customer base.
