Keeping accurate financial records is crucial to avoiding cash flow miscalculations, keeping tax paperwork in line, and tracking your expenses. Filing paperwork incorrectly, failing to keep tabs on invoices or hiring an inexperienced bookkeeper can have negative ramifications for your small business, your reputation and your growth, so stave off potential issues by developing a comprehensive and organized system for managing your finances.

1. Start with your cash flow

Your cash flow is the bread and butter of your establishment and allows you to make new investments, re-invest profits and take on new projects. Mistakes that paint an inaccurate portrait of your cash flow could hinder your company's ability to grow and participate in new opportunities. Make sure you or your bookkeeper are meticulous about recording deposits correctly – (labeling them as deposits rather than income) – and ensure all invoices are paid and settled promptly. Managing your invoices properly can be especially important, since frequent late or unpaid bills will not only result in penalties and cash flow issues, but may also negatively impact your company's access to lines of credit.

2. Monitor your payroll system closely

Your payroll can be one of the biggest expenses for your business, and there are a number of legal and tax implications that come with paying employees. According to the U.S. Small Business Administration, it's important to not only monitor your payroll system closely, but also to ensure you are falling in line with the guidelines set out by the following:

  • Internal Revenue Service
  • Nevada Department of Taxation
  • Worker's compensation
  • Wage and hour laws
  • Social Security Administration
  • Unemployment insurance

3. Taxes

Small business owners have several advantages when it comes to filing their taxes, but claiming lucrative credits and writing off deductions requires you to document all your expenses down to the penny. According to the IRS, small business owners who plan to claim tax benefits should keep records that detail the following: gross receipts, purchases, expenses, travel, transportation and gift costs, assets and employment taxes. All of these categories will come into play when it's time to file your business taxes.  Insufficient or inadequate information may not only make it more difficult for you to file, but you also may miss out on sizable tax benefits.

As a business owner, you may qualify for several benefits, depending on a variety of factors, so look into different credits and deductions to find out which ones you are eligible to claim. They may include charitable contributions, new equipment costs, transportation and entertaining, home office deductions, auto expenses, capital expenses and professional and legal fees. As always, contact your tax advisor for deductibility of items.  Lastly, it's important to have a seasoned group of financial professionals at your disposal, especially if you are a first-time business owner. Conduct thorough reviews on all professionals who are handling the financial side of your company, ranging from advisers and bookkeepers to CPAs and accountants.

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.