The general ledger contains a record of a company’s cash transactions, and a bank statement tracks all money moving in and out of a company’s account. So, theoretically, these two statements should convey the same information and result in the same cash balances. However, in practice, this is rarely the case. Businesses of all sizes need to perform regular reviews, called bank reconciliations, to ensure that these two documents balance.
Good records will help you monitor the progress of your business, prepare your financial statements, identify sources of income, keep track of deductible expenses, keep track of your basis in property, prepare your tax returns, and support items reported on your tax returns.
The most stressful time of the year for small business owners is tax season, which is why 70% of them choose to outsource their tax preparation, according to Forbes.
However, even if you hire a tax professional, you still have substantial work to do before filing your year-end taxes because the accuracy of your return depends on the information that you provide to your accountant.
Some companies close their general ledger earlier in the year and then wait until the end of the calendar year to close payroll, whereas other companies have a combined fiscal year-end close and calendar year close. Regardless of how your business chooses to handle the timing of closing activities, it will need to complete the end of year close accurately to give a complete picture of its financial position and plan for the coming year.
Month-end signals the need to tie all your journal entries together into a complete closing, which explains why it also strikes fear in the heart of business owners. Many owners dread this important step all month because they don’t have a clear picture of what they need to do to close correctly. They worry that they will miss an important step or miscalculate something that will substantially influence their financial documents.
The mileage reimbursement rate is intended to cover the costs of operating a car for business purposes. Costs that the standard mileage rate are expected to cover include standard maintenance, repairs, taxes, gas, insurance, and registration fees.
If you didn't catch the change for 2017, the IRS standard mileage rate was reduced from the previous year.
On Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) is: 53.5 cents per mile for business miles driven, down from 54 cents per mile in 2016.