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By Golly, Take Care of Your Business Paperwork!

Discussion in 'Business & Tax Advice' started by BassTrackerBoats, Feb 20, 2015.

  1. BassTrackerBoats

    BassTrackerBoats Super Moderator Staff Member Moderator Jr. VIP

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    This time of year, in the USA for sure, people start to scramble to make sure that what they earned in the previous calender year is properly accounted for with our taxing agency, The Internal Revenue Service (IRS). I know Ireland has their returns due in October and I'm sure that other countries have various dates that are key to them as well.

    Since I am ensconced in the "get your taxes done" season I thought I'd share some things that could help out that are relative to taxes but some general business order as well.

    Get Your Taxes In Order

    Now, nobody in their right mind is all giddy about dealing with their tax authorities because it almost certainly means you are going to come out of pocket somewhere along the lines... I know that is how it is with me. Whenever I send them any correspondence, it always seems that money is headed their way as well.

    I'm not going to offer specific tax advice as that is not what I do and, to be honest, I pay for that sort of thing as there are too many nuances to the tax codes here for me to be sure if I am in the right or if I am mis-stepping along the way. In fact, the whole end of the business bookkeeping thing is an annoyance for me as an entrepreneur. I'm not a fan of that aspect of the business, have never been a fan and will never be a fan. I'd rather run the business than pore over a chart of accounts and code expenses and I imagine that is how most of you that are entrepreneurs are as well.

    I do want to share some things on what you should be doing all year long though so that when you do encounter your friendly tax collector, you are not digging too deeply into your wallet. Again, this is not tax advice per se but more business management advice.

    Set Up Your Business Structure Properly

    For starters most small businesses automatically set themselves up with an LLC. I have a handful that we use and a couple that are actually dormant so that I can use them for some ideas that are percolating. They are pretty cheap to set up (under 300.00 here using an attorney) and protect you in most instances as well as keep things neat and tidy.

    Is it the best legal structure for your online business?

    I have no clue.

    I paid a CPA (Certified Public Accountant) and before I took the first step in setting up the structure of my business I asked him and based on what I do and how I operate it made sense to set up LLCs. The cost to find out that was minimal considering the entirety of the whole picture. If you are unsure, spend a couple of dollars and ask a professional. You may be able to act as a sole proprietor and not need any other legal entity. Many people that set up an LLC would do just fine operating in the DBA category.

    But be smart and let a person who knows guide you there.

    Don't Neglect Your Bookkeeping

    Once you have your structure in place, set up your bookkeeping process so that it is easy for you and compliant for the government to which you are beholden. It is real easy to just bring in the revenue, hire outsourcers, VAs, buy cool tools, set up a VPS or two and end up with cash in your pocket at the end of the month and not organize anything at all.

    That is also nuts.

    It is so easy to get your bookkeeping in order with almost no hassle at all and that is by paying someone to set you up. I have a bookkeeper that handles all of the "what goes where" for 75.00 a month. I turn over all my paperwork in digital form to her and she makes sure that it is all put in the proper spots on the ledger sheet so that I can look and see where I am spending and if the spending makes any sense.

    She also handles my quarterly taxes so that I am paying them in a timely manner. In the USA, if you are self employed, you have to pay your taxes as you go along or you will incur a penalty at the end of the year. You are actually paying an estimated tax in that instance. Part of my income is as a self employed person and part is as an employee of different companies the way we have things set up so my self employed part needs to comply by reporting and paying quarterly.

    That frees me to run my business and helps me manage my businesses and keeps me from making too many mistakes. Not having your numbers in front of you every month in an organized format is an easy way for money to just slip through your fingers. I recently saw a guy that had several months of paperwork that he did not process properly and had it all stacked up in one huge pile. I cannot image how one could provide quality service if they did not even handle the most mundane task of managing his daily intake and out go of revenue.

    It is a simple process to just pay a bookkeeper to manage that end of things and cost almost nothing compared to the headache you don't have to have lingering about. Let someone that likes that kind of work handle it for you and do it for a song so you can provide quality service to your clients.

    You like to do that kind of work and don't want to use an outside entity to handle that?

    No problem, get Quickbooks or Waveapps or one of those easy peasy accounting programs and put them to use. You may need to download a chart of accounts or something along those lines to make sure you are lining things up properly but if you like that aspect of your business have at it. Just make sure it is done in a timely manner so that you are straight with all your paperwork.

    Review Your Business Expenses on a Regular Basis

    There is no sense in keeping good records if you are not going to look them over here and there. You would be surprised at some of the money you are spending and some of the revenue that you are neglecting when you look at things on a regular basis.

    Take a look and see if you are using all those VPSs you are paying for and using them to close to their full potential. Can you consolidate some of that activity?

    Are you buying ever new bot or piece of software that comes out and then letting it sit? You'll see that if you are looking over your monthly's on a regular basis and that will help reign in some of your frivolous spending.

    How about domains? How many of those did you buy last month that are just sitting in your account and not live? That will stick out when you look at your payments to your friendly registrar.

    Those are just 3 minor things... I know you have your own spending vices that need to be controlled and you will recognize them if you are looking at the outlay in black and white on a regular basis. Your advertising dollars, your office expense, the money you are spending on VAs... we can spend some cash in this industry and let it slide easily if we are not self pressured into proper management.

    I'm a little anal in some ways with my spending... if I buy something I absolutely have to use it that day. Last week I needed to replace the tire and tube on one of my bicycles and ordered both on eBay. The tire came first and I was chaffing at the bit as I had this tire sitting there but could not use it as I needed the tube. I don't think you want to have the same dysfunctional mentality as that but you do want to have a bit of a sense of urgency about yourself when it comes to using what you pay for.

    Compare Your Apples To Other Apples

    I typically do business with people that I trust and appreciate if at all possible and will even pay a bit extra just to know that I am doing business with someone that has good ethics. But I do a lot of business with unknown entities as well... firms that are just firms and there is no person or relationship attached to those business transactions. I periodically look at what I am buying and compare it to what else is offered in the marketplace.

    I won't usually make an adjustment if the difference in $s is minor but if I am spending on something that I could get for less and there is no quality breakdown, I'll make a change. In business you don't make all your money when you sell, you make an awful large percentage of it when you buy. I try to buy properly and operate as a good steward of my outgoing expenses and doing periodic comparison shopping is one of the ways I keep myself in check.

    On the other hand, I can't be had if I know a service or product that I am offered is not up to par. It was not too long ago I was offered $5,000.00 worth of free service from a vendor and I turned him down as his product is not anywhere near the kind of quality I prefer. Just because it can save you money does not make it worth the purchase so that needs to be weighed heavily in the thought process.


    These thoughts can be transposed to whatever kind of business you are running whether it is a series of websites you rank and bank from, services you are providing, running a lead generation operation, operating an advertising business... any kind of business whether it is an online or a brick and mortar or a combination of both.

    Failing to look at these very rudimentary things could cost you a bunch of cash and hurt your business in the process so you would be well served taking some of this into account.

    Remember that even if all you do is own one website that is making you money on the side and you have a full time day job, you still have a business there and should treat it as such.
     
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