For as long as there have been documents, business owners have endeavored to manage their storage and retrieval. Paperwork has always been the bane of the small business owner’s existence. Taking time to organize a good recordkeeping system is time consuming so most business owners just wing it from the start. This usually leads to regret when something like a tax audit or financial crisis rears its ugly head.
It’s a good idea to get organized early on. There is nothing like the peace of mind that comes when you know you have everything under control. Thanks to advances in technology, the filing cabinet can be buried alongside the cassette tape and record player.
Paperless offices are fast becoming the norm and there is a good reason for that. The benefits of having an electronic document management system are overshadowing. Going paperless can save money, boost productivity, save valuable office space and help the environment.
There are a number of cloud based document management systems available today. At BKSC, we make use Box.net and recommend it as part of our bookkeeping service.
Home office deduction rules are a bit tricky but all you need is a little attention to detail. If you work from home and plan to claim a home office tax deduction, consider the answer to these questions first:
Are you using your home office exclusively and regularly for either:
- Your principal place of business,
- A place to meet with clients in the normal course of your business,
- In any connection with your trade or business where the business portion of your home is a separate structure not attached to your home,
- On a regular basis for certain storage use (see storage of inventory or product samples), or
- As a daycare facility.
If you answered yes, to any one of the three options listed above, then you have met the requirements for a qualified home office and you can claim the deduction. You will be able to deduct a percentage of you household expenses such as rent, mortgage expenses, utility bills, repairs, insurance and home depreciation. The value will depend on what percentage of your total home square footage your home office occupies.
Small business owners are extremely busy and they often have to wear many hats. Most of them don’t have the luxury of an internal marketing, customer service or HR department. Many owners have to fulfill these roles themselves and therefore find it very difficult to stay on top of their business finances. But getting on top of the financial measures of your business performance is an important part of running a business, especially if it’s in a growth phase.
There are a few key numbers that all small business owners must know by heart. These numbers will provide valuable insight and act as early warning indicators if something is about to go wrong. Without these indicators you may never know if your business is heading for disaster or not.
These numbers are most useful when converted to ratios. There are many types of ratios you can use to measure the efficiency of your business operations. Financial ratio analysis is nothing more than comparing specific pieces of information taken from your company’s balance sheet and income statement. These are some of the most commonly used ratios: