What you need to know about..... Accounting

What you need to know about...... Accounting

If you set up an LLC or INC, you and the Company are two different entities and you need to recognize business assets VS personal assets. You individually owned a truck and tools that you now use in business and the Company needs to have an insurable interest in them. This can be done by selling or leasing them to the business. Tools used in your business are generally not covered under your homeowner's policy. You need to begin to build a balance sheet with the assets and liabilities of the business. When the business owns or leases the equipment, every expense of the equipment (maintenance, insurance, fuel) is an expense of the company and you need expense to offset income. If you are paid on a percentage of the completion method, you need to choose accrual accounting, not cash accounting. Your QuickBooks or other accounting software will give you a choice. If you have a desire to get into bidding on local government or schools jobs you will eventually have to produce a CPA reviewed financial statement that will have to be on accrual accounting basis. It's best to set it up that way from the start (or shortly thereafter) rather than paying an accountant to convert your books from cash accounting to accrual accounting. We have partnered with AddingMachine.com as their staff includes bookkeepers and CPA's and they will answer your questions at no charge. If you hire them to help you set up your books or have them do your books it's a reasonable hourly fee trip charge. Call Eileen Meilech with any of your accounting questions 602 791-2259 or go to their link under our Helping Biz Tab on our website.

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