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It All Add$ Up August News
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Greetings!
In this month's issue of It All Add$ Up, you'll learn the importance of correctly setting up and periodically reviewing your chart of accounts. We'll also discuss the dangers of commingling business and personal funds and how you can avoid this mistake. Also, look for a couple QuickBooks tips to make your bookkeeping easier.
We put the AX to your TAX worries!
Lauri
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COMMINGLING FUNDS CAN CREATE COSTLY MISTAKES
 Although most business owners know to keep their business assets separate from their personal assets, for many small business owners the urge to blend personal and business funds is a bad idea both legally, as well as financially.
Particularly, if you are an LLC or Corporation and have set up a business entity, it's important to avoid administrative problems and issues with bank accounts and assets. The "corporate veil" refers to the limited liability of your company. When business and personal funds commingle, creditors can "pierce the corporate veil," and access your personal assets for liability through your business.
Read on to find out how to avoid the most common commingling errors and how to reduce taxes.
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QUICKBOOKS TIPS AND SHORTCUTS
- Tip: Use Classes so you can better track profit and loss.
- Tip: Use program preferences to set default accounts for activities like writing checks and paying bills.
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IS IT TIME TO REVIEW YOUR CHART OF ACCOUNTS?
 Perhaps when you set your business up, a friend or relative helped establish a chart of accounts and since then no one has reviewed the system. Almost all small businesses need to take the initial step in setting up their chart of accounts, but over time things change.
QuickBooks has different industry choices, but customization may not go far enough and that's where the value of an experienced bookkeeper can really pay off by fully fitting the chart of accounts to your business.
It is important to correctly track owner equity draws, initial startup costs, expense reimbursements, all costs associated with items or services sold, and to correctly expense fixed versus variable costs. Otherwise, you cannot accurately project revenue and calculate the true ROI. Read on for details on these important entries.
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