Stay At Home And Keep Your Money
By Mark Styranka
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.
About the author: Mark Styranka is an accountant and the owner of Exciting
Destiny.com and writes on a variety of topics but primarily home based business. To
learn more about how you can work at home, Mark recommends that you visit:
Exciting Destiny
By Mark Styranka
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.
About the author: Mark Styranka is an accountant and the owner of Exciting
Destiny.com and writes on a variety of topics but primarily home based business. To
learn more about how you can work at home, Mark recommends that you visit:
Exciting Destiny
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