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• HOW TO SEGREGATE PERSONAL EXPENSES IN QUICKBOOKS SOFTWARE

HOW TO SEGREGATE PERSONAL EXPENSES IN QUICKBOOKS SOFTWARE

Choose a core accounting software system to automate and help perform daily and weekly bookkeeping tasks to save time. You need a more accurate accounting method to keep track of growing expenses. You must keep a thorough record of all your business expenses, which requires recording all receipts at least weekly or possibly daily if you regularly get a lot of receipts. Start-ups might be able to track expenses and accounts payable using a simple spreadsheet, but as your business grows, this won’t be feasible. However, if you really need to change your accounting method, you can seek permission from the IRS to do so once. Once your company chooses an accounting method, you must stick with it per IRS rules. Generally accepted accounting principles (GAAP) require accrual accounting, but the Internal Revenue Service allows qualifying small businesses earning less than $25 million in annual revenue to choose whichever method they prefer.

Accrual accounting involves recording transactions as soon as they occur, even if no money has changed hands. It’s the more commonly used method because it’s less complicated.

Cash accounting involves recording transactions after payments are made or received. There are two methods to choose from, cash and accrual.

Determine Your Accounting Methodīefore you can begin keeping your books, you must first decide how they’re going to be kept. Most small business owners aren’t familiar with accounting best practices, but they’re important to learn to help ensure accuracy in your finances. Without accurate bookkeeping, your business can suffer. While it’s critical to your business’s success to pay attention to all these things, you can’t afford to let your bookkeeping fall by the wayside either. Small business owners, especially those just starting out, are often entirely focused on expanding their client base, growing their business, increasing revenue and ensuring the goods and/or services being provided are top-notch to retain existing customers.