3 DOs for Documenting Entertainment Expenses

Happy New Year! 

If you’re like me, you’ve likely identified some ways to improve your business in 2015. If better recordkeeping is on your list of resolutions, I’ve put together a few tips to help you keep things in order.

Entertainment Expenses: Recordkeeping DOs

  1. Keep Receipts - Keep receipts for client/employee lunches, dinners, etc. Entertainment expenses are tax deductible if you have the proper documentation. 
  2. Take Note - Write a note on the receipt that documents what the purchase was for or who you entertained and why. 
  3. Make a Copy – Make a copy or take a photo of your receipts. Receipts fade over time, but you can protect your deductions by scanning or copying your receipts. 

Remember that bank/credit card statements aren’t enough. Your credit card statement or canceled check proves that you paid the money. Your receipts show what you bought.

Need help getting organized for 2015. Let’s hit the books together! Email David@DEKEbookkeeping.com to learn more. 

Preventing Small Business Fraud

Fraud is a big, bad word that we hear about in the media. It happens within large companies or to individuals who have fallen victim to identity theft. We may take measures to protect ourselves personally, but are we doing enough to protect our businesses?

Small businesses are extremely vulnerable to fraud – both internally and externally. And while there is no true safeguard against it, there are several things you can do to limit your exposure.

5 Ways to Protect Your Small Business

  1. Reconcile all accounts regularly (i.e. on a monthly basis).
  2. Use a trustworthy bookkeeper.
  3. Maintain strong passwords.
  4. Maintain a limited number of accounts, and use them consistently.
  5. Diligently monitor balances, outgoing payments, etc.

Would a professional bookkeeper benefit the security of your business? Contact David@DEKEbookkeeping.com to learn more.

5 Signs It's Time to Outsource Your Bookkeeping

Most business owners start out doing everything themselves (accounting included). It starts off simple enough (recording expenses for meals, office supplies and rent payments), but when bookkeeping becomes more complicated, it’s a logical time to outsource.

5 Signs It’s Time to Outsource Your Bookkeeping

  1. You have outsourced your payroll.
  2. Your business is repaying a loan.
  3. You have recently purchased substantial business assets.
  4. Your business requires multiple bank reconciliations.
  5. You are carrying a balance on a business credit card.

The Benefits of Outsourced Bookkeeping

  • Save Time – Outsourced bookkeeping will free up some of your time for more important things, like running your business. 
  • Save Money – Business owners who do not manage their books in house can save money on expensive software and don’t need to maintain any resources/staff members for the sole purpose of bookkeeping. 
  • Budget Effectively – Books that are maintained by a professional reveal spending and revenue patterns that can help you to budget accordingly. You can quickly identify when it’s time to spend more and when you need to cutback.
  • Peace of Mind – A professional bookkeeper will be knowledgeable of best practices and has access to the proper tools. When you hire a professional, you can trust that your bookkeeping is done right.

Is outsourced bookkeeping right for your business? Contact David@DEKEbookkeeping.com to learn more. 

Are You Classifying Independent Contractors Correctly?

It is absolutely crucial to classify labor correctly. Proper record keeping will ensure that you aren’t in hot water with the IRS come tax season. There are some simple ways in which to determine whether an individual is an employee or independent contractor, but many small business owners are tempted to classify workers as independent contractors regardless of the working relationship in order to:

  • Avoid payroll taxes
  • Avoid the hassle of processing payroll and the need to maintain detailed records
  • Minimize employee liability
  • Maintain a flexible working relationship

A Contract May Not Be Enough

Most business owners assume that a contract is sufficient grounds to classify an individual as an independent contractor, but that isn’t always the case. FedEx was accused of miss-classifying more than 2,000 drivers earlier this year, and the company will owe millions in penalties as a result. 

DEKE Business Bookkeeping can help you to classify labor correctly, and with our new payroll service offerings, maintaining employees may be a whole lot easier than you previously thought! Email David@DEKEbookeeping.com to schedule a complimentary call. 



We all know that good bookkeeping practices and organized financial records are an asset come tax time, but in general, bookkeeping serves an even more important purpose… benchmarking.

What is Benchmarking?

Benchmarking is the evaluation of something by comparison to a standard. When evaluating business processes and performance, one would likely use industry standards or a competitor’s practices as a point of comparison. 

What is the Bookkeeping/Benchmarking Connection?

You likely have certain production or performance goals for your company. Analyzing how you "measure up" to those those goals (benchmarking) starts with data (from your own books). This can be compared to competitors or an industry standard. Over the years (as you accumulate more data) you will be better able to track progress and milestones that are crucial to goal achievement. 

Reach your small business goals with benchmarking! Email David@DEKEbookkeeping.com to learn more.


Employee vs. Contractor

There can be a lot of gray area when it comes to running a business, but when it comes to labor, that shouldn't be the case. Keep employees and contractors classified (and documented) correctly by evaluating the following aspects of your working relationship:

  • Exclusivity - Is the individual in question exclusively working for you, or do they assist other businesses in a similar way?
  • Tools - The individual in question likely uses tools or resources to complete a job. Who do those belong to, your company or the individual?
  • Control - Is the individual in question managed similar to other company employees, or does he/she manage work flow on their own? 

If you've answered the above questions and still aren't sure how to classify labor, we can help! Email David@DEKEbookkeeping.com to learn more. 

3 Ways to Improve Collections

As all business owners know that getting paid can be tricky. You have heard it before… “The check is in the mail,” “I’ll call you later with credit card information,” or “I’ll just give you a check when I see you next.” Sometimes it works out, and sometimes it doesn’t. In any case, it’s a headache. 

The key to effective collections is having a process in place, and while that process may vary from business to business, some universal standards apply. 

Improve Collections by Remembering BMP

  • Blame – Blame the bookkeeper (but no names please)! When an account is past due you will likely need to prompt the client/customer to pay the balanced owed. A gentle reminder that throws someone else (namely me) under the bus is a non-confrontational way to bring the topic up. Tell them your bookkeeper has been hassling you to get things in order, and you need to "get him off your back."
  • Monthly – Reconcile statements on a monthly basis. If you are managing account balances for clients, issue reports to them monthly.
  • Priority – Starting is often the hardest part when it comes to getting your books in order. When collecting past due balances, give priority to the accounts that are furthest in arrears.

Small changes can make a big difference when it comes to managing company money. Email David@DEKEbookkeeping.com to learn more. 

Important Bookkeeping Tips

Most business owners understand the importance of good bookkeeping. We know it helps us better manage company money, and we know that good books can be especially helpful come tax season. We also know that errors can be costly. Whether you do it yourself or seek a professional, it's important to do the job right.  

Ensure your books are "good books" by:

  • Keeping a record of your receipts and invoices in numeric order. 
  • Maintaining consistent and complete business records to document all of your business transactions.
  • Keeping track of your business account statements, and reconcile your accounts on a regular (preferably monthly) basis. 

There is a lot more that can be said about best bookkeeping practices, but the above tips are the most important to remember. If you want to learn more, SCORE, a nonprofit association that promotes the growth and success of small businesses, has some great resources available including the Top 10 Bookkeping Mistakes. This may be a helpful reference for those of you who are evaluating your current bookkeeping system. 

Think your business could benefit from professional bookkeeping services? Email David@DEKEbookkeeping.com to learn more. 

Strategic Spending

As the year comes to a close, many small business owners are realizing significant profits. If you fall into that category, congratulations! Now may be a great time to consider using a portion of those profits to prepay some expenses for 2014. Strategic spending now may help to reduce your tax burden later.

Some of the most common prepaid expenses include:

  • Rent
  • Utilities
  • Insurance Coverage
  • Other Goods and Services

Keep in mind that some vendors may even be willing to extend discounts for prepayment.

Your unique financial situation will dictate whether or not expense prepayment is appropriate for your business. Unsure of where your business stands on the profit/loss spectrum? Email questions to David@DEKEbookkeeping.com or schedule an evaluation to learn more!

Purchasing Equipment

We are ¾ of the way through the fiscal year, and you likely already know where your business will fall on the profit/loss spectrum. Armed with that information, now is the time to explore the variety of ways to increase profits or decrease tax liability (depending upon your business and personal goals). 

In an effort to decrease their tax liability, many business owners opt to purchase new equipment, furniture and/or vehicles for deduction purposes. The concept is relatively simple, but there is certainly more than one way to approach deductions (i.e. deduct the total cost, deduct portions of the purchase over time, etc.)  

Deducting portions of a fixed asset purchase over time (depreciation) may be an appropriate method. Alternatively, many business owners take advantage of the accelerated depreciation opportunity provided by the IRS. Accelerated depreciation allows for greater deductions to be taken in the earlier years of an asset’s life (to include fully depreciating the cost of a fixed asset in the year the item is purchased). This results in an immediate reduction in business profits and ultimately tax liability. 

So what makes sense for your business? Contact David Knab to learn more about simple ways to reduce your tax liability. 


Determining Profit

Small business owners often adopt an accounting system (or bookkeeping system) for the sole purpose of determining profit. The concept seems pretty simple, but there is much more information that can be gleaned from a good accounting system than just the amount of money coming in. 

It's More than Simple Subtraction

The ability to determine profit starts with the diligent tracking of income and expenses, but an accounting system should provide insights beyond simple subtraction. Business owners should be studying their profit and loss statement to identify ways to increase profits. Which products or services are best sellers? Which customers purchase the most? This is the sort of information that will help to fuel profits in the future.  

Keep in mind that reports can be relatively useless without a point of comparison. Compare profit findings from period to period. Are there any trends? 

Most of us are setting goals, but how can we track the progress? How should company money be spent? Is it a good year to purchase new equipment or take a big business trip? The proper accounting system is crucial to answering these questions. Business owners who possess a firm understanding of profit (the amount, its sources, etc.) are better equipped to manage cash, minimize tax liabilities and achieve sustainable growth. 

In Review: Tips for Determining Profit

  • Diligently track income and expenses.
  • Subtract expenses from income. 
  • Determine the best sources of income (i.e. which products/services are best sellers and which customers are buying the most). 
  • Compare findings to previous periods. Look for trends.  

Need help determining your profit? Submit an inquiry or call (843) 225-6522.


Setting the Records Straight

Diligent bookkeeping can be overwhelming, largely because business owners don’t think much about it until tax season. The truth is that there is no better time than now to set your bookkeeping records straight. 

Every small business owner wants to minimize his or her tax liability, but it is impossible to do so without the proper documentation. Are your bookkeeping records in order? Not sure?  It may be helpful to consider some of the following:

  • Tracking Expenses 
  • Expense Payment/Prepayment
  • Tracking Income
  • Determining Profit
  • Deferring Income

Over the next few months I will be expanding upon the items listed above, so stay tuned for details!  

Want to learn more about the benefits of proper business bookkeeping? Contact me for more information.