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The accuracy of the records can be verified by doing a reconciliation at least once a month. Reconciliation is the process of comparing two or more sets of records to determine if their balances agree. This process will disclose if the records are completed accurately. Why it’s important to reconcile? A regular review of accounts can help people to determine problems timely before getting out of hand. Here are some critical reasons for doing this. Catching Fraud One of the mo

The cash basis and accrual basis of accounting are two different methods used to record accounting transactions. The core underlying difference between the two methods is in the timing of recording transactions. When aggregated over time, the results of the two methods are approximately the same. A brief description of each method follows: The Cash Method Revenue is recorded from the sale of goods or the performance of services in the year that payment is received, regardless

​ Maybe you stash them away in a shoebox. Or maybe you keep them in your wallet until it can’t fit any more. That’s right, I’m talking about receipts. Every small business owner has them. Some hoard them, while others toss them. Whatever your policy, there’s a few things you should know about receipts and taxes. 1. Saving Receipts for Taxes When Itemizing Deductions If you an individual filer, you may be able to use itemized deductions to receive a greater reduction in tax li

In the operation of your business, you will come across many types of records related to your income and expense transactions. While it is impossible to list all the records for every possible transaction, following are some examples of records to maintain: Gross receipts are the income you receive from your business. You should keep supporting documents that show the amounts and sources of your gross receipts. Documents for gross receipts include the following: Cash register