Small Business Tips from a CPA

Having a small business is great!  Making sure it’s set up properly and your bookkeeping is being done correctly is very important.  Here are a few items that will help – but as always, talk to your accountant:

• Use a good small business software such as QuickBooks.
• Categorize your expenses into direct and overhead to help determine your markup for estimating your sales price or billable hourly rate.
• Do not forget to add the profit into your calculation of the sales price or hourly rate.
• You are no longer working for another company.  You are responsible for your own taxes (including the employer  portion of the Social Security).
• Account for sick time, vacation time, and pension.
• Do not forget a home office if that is your base of operation.
• Account for your business mileage.
• If your profit is nearing $75,000 to $100,000 talk to your accountant about changing your entity to an SCorp.
• If you are just starting your business it is important to talk with your accountant and lawyer to discuss the entity (proprietorship, partnership, or SCorp) and budget to see if you have a viable business.

As always, working with your accountant to ensure you are set up properly, your bookkeeping is correct and you are keeping track of everything you should be is tantamount to running your business.  If you have any questions or aren’t sure about any aspect of bookkeeping, your accountant will be happy to advise you.

Al DePalantino, CPA
Albertjohn DePalantino & Co, PC
Certified Public Accounts
depalantino.com