Tuesday, January 28, 2014
The best made investment
Fresh out of high school, I decided to enroll in a small but growing local community college. I had no idea what I wanted to do or what I wanted to learn. I was just a kid enthralled with broadcasting and being on the radio. But everyone said I needed to go to college. So, I enrolled in the business/accounting program figuring I would need a good knowledge of business to make it in the world. My heart and head weren't into it so I dropped out after a year and a half. I would eventually go back to college and complete my education later in life. Accounting 101 was the single most important course I would enroll in, that first year of college.
It was clear early on that I was not cut out to be an accountant. But, getting that basic understanding of accounting and bookkeeping principles was an important learning experience, one that I would keep coming back to for the rest of my life. I didn't even realize how important it was at the time.
So when it came time to put together a blog entry this week I was having a bit of a writer's block. So, I decided to load up the tax prep software that I had purchased to see if I could get a start on the filing of this year's income taxes. I keep great records and the process went along very quickly. I was done and ready to file the return in no time.
Having a system to keep track of your business is essential. Computer software makes the record keeping easy. But, if you don't have the basic understanding of what you are doing, you can easily be overwhelmed by the task. So, today I give you my recommend list, very unscientific, of things I think everyone should do to keep track of your voiceover finances.
1. Get organized and have a system – This can be as simple as eight or ten manila folders in a box. If you keep things electronically, then a folder on your computer with sub folders. Mark or name the folder with obvious titles such as: advertising/marketing, communication expenses, internet services, office expenses, vehicle expenses, utilities, professional fees, and miscellaneous. Do this even if you also have an accounting system on your computer. You'll need these folders to easily retrieve a document later, especially at tax time. This brings to mind tip #2
2. Use the same account names as your taxing authority - If you are in the US, set up your system of expense accounts to reflect those used on the schedules designed by the Internal Revenue Service or to reflect those used by the tax revenue entity you report to. You'll be very glad you did at tax time.
3. Take an adult education or on line course in basic bookkeeping. There are many of these available on You Tube for free. Take the time to learn, despite the fact you may be using Quick Books, Quicken, ZoHo Books, or other computer based system. If you have a basic understanding of double entry bookkeeping and the principles of debit and credit, your year end obligations to the government will be less daunting. Knowing that I have kept good records during the year, I simply print off a standard report called an Income Statement and transfer the amounts to the tax form. Voila! I'm done.
4. Ask your tax adviser - If you don't want to take the time to learn about bookkeeping, then meet with your tax adviser at the beginning of the year. Ask him or her how he or she would like to have the information organized at the end of the year. Then, keep up that system throughout the year.
5. Keep good records - I am a firm believer that keeping good records of money coming in and money going out is critical. I am reminded of that old saying from back in the 60's. “Do you know where your kids are?” Translated that would be: “Do you know where your money is?