When it comes time to get our taxes done, my husband and I know as entrepreneurs, the importance of keeping good business records.
Last night, I’d just finished cleaning up after a wonderful dinner of Chicken and eggplant Parmigiana with friends and family when my husband comes bursting into the kitchen with EXCITING words.
“Guess what!
The accountant just emailed and we don’t owe any more taxes!”
This means we worked with our accountant and calculated our income to pay the right amount of advanced taxes. We both spend time working on specific systems to track our businesses. Every business must maintain books and records of revenues and expenses. When you have good records, you’re running your business like a business and know if you’re making money. But, most of all, like us, you have the facts and figures ready for your tax accountant.
Here are my 7 tips I recommend to make sure you’re keeping good business records for your Direct Sales Business
#1 A separate Bank account. All cash or checks you receive in connection with your business should be deposited to this separate account. Keep a copy of your deposit slips and statements. Have a copy of cancelled checks in case you need any proof of receipts
#2 Receipts for Business Expenses. Receipts should be kept for all business expenses in a separate file for each year. Each receipt should indicate the date and the nature of the expense. E.G. a credit card receipt for a business expense should indicate the nature of the expense for your business.
#3 Tracking Expenses. Get 12 envelopes and mark them JANUARY THROUGH DECEMBER to keep receipts separated monthly. This is an old fashioned way of keeping track, but I still do this even today. I then suggest you complete an “Income & Expense” summary each month.
#4 Categories for Expenses. Check with your tax advisor or accountant to insure you have the proper documentation on legitimate expenses for your business. Here are a few examples.
- Car Dues & Subscriptions
- Office Supplies Promotional Gifts
- Postage Entertainment
- Travel Telephone
- Training/Meetings Bank Fees
#5 Create a Profit and Loss spreadsheet. Track revenues (money coming in from your business) and subtract legitimate business expenses (recommended by your accountant) and you will show the profit (or loss) you make every month.
#6 Complete monthly worksheets available in the DIRECT SALES PLANNER worksheets to help you stay on top of tracking records. The important worksheets are
- After Party Summary Worksheet. This helps you with your true sales for each party along with follow-up.
- Monthly Expense Worksheet helps you keep a detailed record of each legitimate expense and the category to record its.
- Monthly Business RECAP Worksheet. You’ll find this worksheet is simple to follow with a formula to know if you’re making money in your business.
#7 MOST IMPORTANT: Follow your Account and Tax Advisor’s advice to help you manage your business records
When I work with my coaching clients, I always recommend systems to help them scale and grow their business. Keeping good business records is one of those systems that is imperative to running a profitable direct sales business.
My “Work Smart Worksheets” will help you create that system of tracking your records so you’re ready for that ever-looming tax day on April 15th! Here is the link for the worksheets
You get the worksheets as a FREE BONUS if you order the Direct Sales Planner.
Need more systems to help you move up a level in leadership? Then take the time to schedule a complimentary coaching session and I’ll show you a success path full of systems and strategies that work! Email me at mymentorbiz@gmail.com today!
