Keeping Records For A New Business?

[drusmooth]

Hello,

I started an Internet business in CALIFORNIA this year and was looking for some advice on how I should handle my records for tax purposes. My business is selling tickets over the Internet. I have 3 employees which I pay though a payroll processing service (ADP). I am debating on whether I should have a bookkeeper charge 300 a month to keep track of everything or if I should just do a simple sales minus expenses for the year and do it that way. I may not be exact but it will be within 1K of my earnings. Will I get in trouble if I don't have books for my business? I have sold between 10 and 15 thousand tickets this year. entering all those transactions into QuickBooks would take too much time. My thought was to take my sales numbers from my POS, subtract out my credit card bills, payroll totals, etc...and I should have my earnings. wondering if I am asking for trouble doing things this way...
Thanks

 

[Snipes5]

Get a good bookkeeper. You get what you pay for, and I don't know about anyone else, but we cringe when someone comes in even with quickbooks. It isn't double-entry, and if not used properly, it can be a nightmare.

Take the time and do it right. And beginning in January, get it done regularly so you don't have all this stuff left over at the end.

If you don't really have a system, a bookkeeper would rather start from receipts and no records at all, than screwed up records that have to be reconstructed.

And yes, either understating or overstating your income can cause problems.

Snipes

 

[drusmooth]

Hi,

thanks for the advice. I feel like as long as I separate out my business expenses and my personal stuff then I can come up with a very accurate total for my earnings. My question is basically whether or not I need "books" bring to an accountant or if an accurate total of my sales and expenses is fine?
Thanks
Brian

 

[Snipes5]

If you brought something like that in to me, with that much business volume, and all you had were totals, I'd be rather skittish about taking you on as a client.

You should have totals AND books. If you have both, it's much easier for us to find you the proper deductions, so you pay as little tax as legally permissible.

Your situation is the sort of thing that's just begging to be audited.

Snipes

 

[abezon]

You aren't just asking for trouble, you're begging for it. If you don't want to pay for bookkeeping, take a class & do it yourself, but keep proper books!