Small Business owners want and need to spend time growing their business, but oftentimes that means they are not keeping their bookkeeping up to date or keeping good records. This can be a costly mistake! IRS auditors could discover that the business has inadequate records and will use the bank deposit method to estimate gross income. This could be a huge nightmare for a company as this method presumes that all monies deposited into the bank is income and the burden of proof is on the company’s owner to prove that it is not.
As an example, a company may have received proceeds from a loan that was deposited in the bank. Loan proceeds really aren’t income but would be considered as such if the company could not prove otherwise. Without evidence and up-to-date bookkeeping, the deposited amounts would be added to gross income and taxed as such.
As an owner of a small business you should be spending time growing your business. However, if you are finding it hard to fit in the necessary time to keep up with your bookkeeping, let Ace Business Solutions do that for you. Ace Business Solutions has several different bookkeeping options that will ensure you have adequate and timely records to help keep your business in compliance with federal and state laws. “Help your business grow with ACE in the Hole!”
“Bookkeeping Management”, The General Ledger -The complete newsletter for Professional Bookkeepers. (Volume 34, Number 5, May 2017). Retrieved from www.aipb.org