Accounting Tips For You

Tax authorities are often relaxed about the need for small business to prepare and produce formal accounting records. Often the requirement is simply that each business retains sufficient financial records to support the accounts submitted.

Such advice from tax authorities places a burden upon small business in that the vast majority are honest hard working people who are meticulous about keeping accounting records of sales made during the financial year. Unfortunately many small businesses are not so meticulous about keeping financial records of business expenses in their accounts.

A typical taxi driver may for instance keep a diary and record the daily receipts from his fares. If those recorded receipts are accurate then the total sales turnover for the year will show the correct total. The same may not be true of expenses and the accounts thereby overstated.

The total business expenses of the taxi driver would mainly include the fuel receipts plus the other running costs of the business. Typically a receipt for fuel will be obtained and kept in a file or shoe box. Some may get mislaid and lost and be missing from the final accounts preparation.

Other receipts for miscellaneous items may not even be retained as forgotten, lost or not thought of at the time of purchase. Examples may be purchase of the diary in which sales records are kept, business cards, other stationery, and cash payments for a whole variety of miscellaneous items.

The same practise is also often applicable to not just taxi drivers but many small businesses.

A small business owner may visit a supermarket for groceries and also buy an item of stationery for business use the cost of which is lost when the grocery receipt is discarded. If close attention is paid then the stationery item could have been obtained on a separate receipt and the cost of t Read more

I’m a big fan of open source software. The idea of collaboration and access appeals to me. It’s a building block of the work I do with my clients. It’s my “style” so, naturally it’s an integral part of the way I want to see the world.

For small businesses, nonprofit clients, and the newbie entrepreneur I often share open source as an alternative to high-priced, proprietary software such as Norton Antivirus, Microsoft Office, and QuickBooks Accounting. While these are good products, they’re expensive and likely to suck the user into an annual cycle of buying new versions at increasingly higher costs.

And those costs increase not only in terms of product purchase price, but in system conflicts, system bloat, learning curves due to functionality changes, sometimes even forcing the user to buy new equipment altogether just to “keep up.”

The #1 question I’m asked is, “What else can I do?” Sometimes the answer is easy. For a single user working from home I recommend AVG Free Edition Antivirus instead of Mcafee or Norton. I recommend OpenOffice as a dependable and full-featured alternative to Microsoft Office.

It is important to remember that there are trade-offs. After all, nothing is really free. With most open source applications you will not get technical support. Many people like knowing that there’s an 800 number they can call when they have a question even though it is recommended that you check with the software company’s web-based support site before calling. Open Source developers typically create forums where others can post comments and questions. These forums and online support pages are more helpful than critics give them credit for.

Having set the stage, it’s now time to discuss the idea of using open source software for your business accounting needs. When it comes to ac Read more