Archive for December, 2009

Business and Personal Expenses

The separation of business and personal expenses should be absolute. Do not commingle funds or expenses. Your small business, even a sole proprietorship, should have a checking account. If you do not have a business credit card, then have two personal credit cards and use one solely for business and the other solely for personal expenses.

Income and Deductions

A deduction is an ordinary and necessary business expense. Business deductions are more than just rent and utilities. Make sure you are accounting properly for all income and expenses.

Some common mistakes are:

• Job expenses classified as overhead expenses or vice versa
• Prepaid expenses not accrued
• Gift card sales and customer deposits recorded as income

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