Stay At Home And Keep Your Money

Stay At Home And Keep Your Money



People will put tremendous effort into making money through their stay at​ home business. Focusing on​ revenue is​ extremely important but it​ is​ also important to​ minimize the​ outflow of​ cash. I am always amazed when an​ accounting client will tell me that they do not know what they can expense through their business or​ even what they have expensed through their business. Both these items are very important.

Our businesses pay income tax based on​ its net income. So when we​ reduce net income then we​ reduce our income tax payment. Therefore we​ must make sure that we​ are taking every tax deduction within the​ law. if​ you don't know what you can deduct from your income then you should contact a​ trusted tax advisor. Alternately,​ there is​ much literature out there that will help you learn. the​ internet and library are great,​ free resources. if​ you complete your own tax returns,​ then your tax software will have lots of​ useful information. if​ you are not minimizing your taxes,​ then you are just giving away your money. in​ One of​ Robert Kiyosaki's Rich Dad series of​ books he mentions that you may be able to​ give yourself a​ raise simply by lowering your taxes. if​ you don't have the​ time or​ aptitude to​ learn all the​ rules yourself,​ then look for a​ great tax advisor for your team. This could pay for itself and more.

I am also surprised when people bring their receipts to​ us at​ the​ end of​ the​ year. Many times these receipts are not even organized. Countless people have not been recording their revenue and expenses anywhere throughout the​ year. Somehow they are managing their business by what is​ in​ the​ bank account and swirling around in​ their head. This is​ a​ very dangerous way to​ run your business. I have witnessed that the​ success of​ our client's businesses is​ directly correlated to​ their attention to​ the​ financial details of​ the​ business. This is​ not a​ scientific correlation,​ but the​ fact that the​ organized business has a​ greater likelihood of​ success is​ apparent to​ me from the​ examples I have seen.

Some basic things that you should do right away:

1. Set up a​ separate bank account and credit card for your business. This will help you organize and will help to​ prove to​ the​ taxing authorities that you do,​ indeed,​ have a​ business (especially important when expenses exceed revenue at​ the​ start).

2. Get some basic accounting software that will help you to​ reconcile your bank and credit card accounts. This software will also categorize your revenue and expenses allowing you to​ review your financial results on​ a​ regular basis.

3. Regularly and critically review your financial information. Can you increase revenues or​ decrease expenses? How much of​ your revenue are you actually keeping? Are your revenue and expenditures properly balanced?

Only very basic information has been discussed here. Although you may not want to​ divert your time away from revenue producing work,​ you will also need to​ focus on​ keeping the​ money that you do make. if​ your situation allows it,​ you can hire some help (or enlist family members) to​ help you monitor your stay at​ home business' finances. But you must make the​ effort and you will be glad that you did.




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