An Expense Report is a form that is used to report business expenses that must be incurred to run the business. The Expense Reports are typically used by the employees of the company to report various business expenses incurred by them out of their pockets. So basically, an Expense Report is a form through which the employees request reimbursement of all the business expenses incurred by them on behalf of the company. The employees typically attach receipts for the expenses incurred that go beyond a minimum amount with the Expense Report. Furthermore, the business entity scrutinizes the Expense Reports submitted by the employees to check for their correctness and validity. On finding these as the authorized business expenses, the business entity may reimburse the amounts so requested by the employees via the expense reports. Post reimbursement, the business entity can record the reimbursed amount as business expenses that impact the accounting profit and the taxable profit of the company. What Should An Expense Report Include? As stated earlier, an Expense Report is a document that itemizes or breaks down the business expenses incurred by the employees on behalf of the company. Further, it requires the employees to attach the receipts associated with such expenses. An Expense Report can include various details that are particular to your business entity. However, various fundamental details must be included in an expense report. These are as follows: Date This is the date on which the expense was incurred. Such a date matches the date specified on the receipt for such an expense. Vendor This is the name of the Vendor from whom a specific item was purchased or the one whose services were availed. Nature This relates to the type of expense incurred like meals, air tickets, car rental, etc. Total Amount This is the total cost of an expense incurred including taxes. Such an amount matches the amount specified on the related invoice. Account This refers to the account to which such an expense is to be charged. That is the customer for whom such an expense was incurred. Business entities commonly use Account Numbers to represent customers. Description This is a brief account of what each of the business expenses are all about. Sub-Total For Each Expense These are the sub-totals for each type of business expense included in the Expense Report. This turns out handy for the bookkeeper to update such information into your accounting software. Why Do We Need Expense Reports? There are a variety of purposes for which Expense Reports are needed. These include: Tracking Expenses Over a Reporting Period Expense Reports help you to understand how much you are spending as a business entity in respect of specific expense categories. Thus, you are able to see if any particular expense category is leading to increasing your costs. Reimbursing Employees As mentioned earlier, the employees associated with small businesses typically incur expenses out of their pocket and ask for reimbursement of the same expenses. Thus, you need a proper system in place to ensure that the claims being demanded are authorized business expenses. This is where the Expense Reports come handy. They itemize the expenses which give you an understanding of when, where, and on how these expenses were incurred. Do Your Taxes Effectively Many expenses incurred by your employees while at work are tax-deductible. However, you cannot claim tax deductions for such expenses till the time you have a proof of the same. With the help of Expense Reports, you can keep a track of these tax-deductible expenses which might not reflect in your bank account history. Thus, this makes it easy for you to claim tax deductions for such business expenses during the tax time. Source: https://quickbooks.intuit.com/global/resources/expenses/expense-report-template/
8 Most Common Small Business Mistakes: 1. Not taking bookkeeping seriously 2. Business owners mix personal income with their business income 3. Trying to manage everything yourself. Know your strengths and weaknesses 4. Covering small expenses out of pocket without recording 5. Not maintaining proper records. Original receipts are either misplaced or discarded. 6. Not properly planning for tax season and tax liability 7. Not consulting with an accounting professional for guidance 8. Failing to make a budget. There are many more mistakes but these are the popular ones. Small business accounting mistakes are not small and can dissolve the business in the long run. Don't make these mistakes. Contact us for help at (876)707-8172 or info@pcsjm.com.
Whether a business is operated as a company, self-employed entity, partnership or any other type of organization, good record-keeping practices should be adopted for five main reasons: 1. Well-kept records may shorten the length of time an income tax audit takes to be completed. 2. It can help you get loans from banks and other creditors. 3. Keeps you better informed about the financial position of your business. 4. It can mean tax savings, as it can be used as a reminder of deductible expenses and credits. 5. It can help to verify all your business expenses for tax audit purposes.
A pension is basically a long-term savings plan with tax relief. Getting tax relief on pensions means some of your money that would have gone to the government as tax goes into your pension instead. The tax relief would be most beneficial to those who are earning more than the current income tax threshold of $1,500,096 per annum. If you contribute to a pension scheme (Approved Superannuation Fund or Retirement Scheme) your regular contributions are invested so that they grow throughout your career and then provide you with an income in retirement. A maximum of 20% of your annual gross taxable income or emoluments can be contributed to a pension scheme prior to attaining the age of retirement, 65 years. Most employers have a group pension plan for their employees. However, most self-employed, contract workers or those employed who are not contributing to a group pension plan are not contributing to an approved pension scheme. We are encouraging these groups of persons to contribute to an approved pension plan so that you can benefit from the tax relief and also have another source of income in retirement.
Do you want to know how your business is performing? Looking at your sales/income alone does not give you a true reflection of your profitability. Let us help you with your accounting services so that you can have accurate information to make meaningful decisions. Did you know that businesses that maintain proper accounting records are more likely to - pay less tax at the end of the year because all their business related expenses are accounted for; - make more informed decision about the business; and - is able to obtain loans from financial institutions.
We are offering on the spot tax preparation services to help you meet the March 15 Tax deadline. Let us help you avoid interest and penalty!
Tax deadline is March 15, 2019. Let us help you meet the deadline. Don't wait to get ready for tax season 2019. It may seem early but we only have one more month and couple days until the end of the year.
In simple terms, self-employed individuals are independent contractors or someone carrying on a trade or business. These persons would not be under any direct supervision or control of an employer.
