If you’re in business and use QuickBooks to keep track of income and expenses for the year, you should do the following:
For the year, you must maintain accurate accounting records, and this includes saving your bank records and maintaining all your income receipts and expense receipts. You must maintain your records under the CASH method of accounting and furnish year-end statements to your accountant. This includes year end:
- Detailed General Ledger
- Profit & Loss Statement
- Balance Sheet Statement
- Working Trial Balance
- Year End Payroll Reports
- Year End Payroll Summary
- Bank Statement Reconciliation
- Statement of Cash Flow
- List of all new assets and furnish a description of purchased, date and cost.
- Furnish information on all assets sold, date and amount received.
- Do you maintain a mileage log for all your business vehicles.
- Do NOT include personal expenses in with your business expenses.
- Personal expenses paid by your business should be shown in a draw or distribution account.
If you’re a General Partnership, you must have a partnership agreement or if you’re a Partnership LLC, you must a have an operating agreement along with your partnership agreement. If you wish your LLC to be an S Corporation, you will need to file Form 2553 and if you want to be taxed as a C Corporation, a copy of Form 8832 needs to be filed.
If you’re an “S” Corporation, or a “C” Corporation, you must have a Corporate Minute Book and keep it current each year and stock certificates must be issued to each shareholder.
Every business should have an “Accountable Reimbursement Plan” for all their employees. By having this, it is a business expense and not income to the employee.
Provide copies of each.
You should not attempt to form any of these entities without consulting with legal counsel.
You should have regular meetings with your accountant/tax professional, bookkeeper, legal counsel, and insurance representative. To be successful, you need good people and good records.