Elizabeth’s Tips
Elizabeth’s Tips
Business Planning
Do NOT spend too much time on the Business Plan.
Start the business!
Using your 401K funds before retirement
Borrow from your 401K before using your credit card
Rather than making the monthly payment at a credit card rate, you can borrow from your 401K
at prime (3.25% as of 11/1/09) and save hundreds or even thousands of dollars in interest.
Plus, you will be keeping the interest, since it will increase your retirement account when you
pay the loan back. It is a win-win!
Tracking your Expenses/Deductions
Start Keeping Track of your 2010 income & expenses now!
It is much easier to stay on top of your finances if you begin tracking week by week or month
by month rather than by waiting until next year to sort it out.
Do NOT co-mingle funds….
Keep separate bank accounts for each business, trust and/or individual account
Use one credit card for business and one credit card for personal
Organizing your Financial Records
Retain Copies of your cancelled checks
Be sure to order copies of cancelled checks with all of your personal & business bank
statements.
Why?
1. To prevent embezzlement.
If you have given someone else signatory authority on your account, you should be reviewing
the cleared checks to be sure that the other person has not written a check that you did not
approve.
Even if you have not given someone else signatory authority, you should be reviewing the
cancelled checks to be sure that someone else has not committed fraud on your account.
Fraud is more common than you may think. Banks make errors, too. You really need to double
check your account on a regular basis, so you do not become a victim! If you need any
assistance with developing your accounting and control systems, please call us!
2. Inevitably, some vendor or auditor will want evidence of your payment
someday.
It is much cheaper to pay your bank $1 per month and have the evidence at your fingertips,
then to have to pay $15 per item later.
Organize your Files
File your bank and investment statements by month in a binder. Use tabs (available at Staples)
for each account. Keep your records organized to be sure to take the max in deductions.
Tax Withholdings – Are you getting large refunds?
Do NOT give the government too much money! Be sure to be careful not to withhold
too much from your paychecks. With the overwhelming federal & state budget deficits, why
take the chance on having to wait for your refund?
Do not use your tax refund as a savings mechanism. Develop the discipline to deposit 10% of
each paycheck in an interest-bearing savings account.
Get tax information
you can use!
Elizabeth Hale, CPA
20 years of experience
eeCPA
