Thursday, May 8, 2014

Are You A Financial Sinner?

One of the biggest mistakes new business owners make are almost always financial. Business owners typically have a great idea but no degree in accounting, thus mistakes are made without knowing or without intent. I’m listing the most common business mistakes below in order to help you identify them and to prevent these financial hardships from happening.

Not keeping financial records up to date is the biggest headache. First, you are required by law to keep accurate and accessible financial records. Second, it is important to your P/L statement to keep the best financial records possible to obtain further capital, etc.

Inc.com states miscalculation of employee status is another no no. I agree! “This issue is becoming increasingly important as more businesses outsource jobs to contractors. It is also something the IRS has been paying close attention to, so be cautious! Misclassification can result in big fines and government scrutiny. Play it safe and classify accordingly,” according to Inc.com.

Finally, not incorporating your business. If something goes wrong, an unincorporated business puts the owner(s) at personal financial risk. An incorporated business does not. So, it is better to incorporate in most cases.

Until tomorrow,
Twyla N. Garrett

No comments:

Post a Comment

Twitter Updates