1. You need to properly close out sole proprietor and start up as a corporation! Unfortunately, many sole proprietors making this transition do not properly account for initial investment costs and use categories that are too broad for the chart of accounts in the new corporation.

2. You need the proper accounts set up to track the start up costs and other capitalization issues. These may include decisions concerning transferring property, i.e. computers, cars, equipment etc. to the new corporation or LLC; or does it make sense to lease it to the new company?

3. The fees for a Tax/Bookkeeper to unravel your annual tax/bookkeeping (at $100 to $200/hr) at tax time is much more expensive than doing it properly from the start! Tax/Bookkeepers are very busy at the end of the tax year and may not have time to properly address your confusion, which could result in late payments and penalties!

4. Three out of five businesses fail within the first three years. Monthly profit and loss statements (P & L's) are crucial to analyze business trends, wasted expenditures and effective marketing. Relying on your business checking balance as a means to measure how your business is doing is a sure method for failure!

5. If books are set up properly to begin with, it is a seamless transition when you have a bookkeeper or accountant come in at a later date. Reminder, to fix problems later is more expensive!

6. Avoid audits, particularly payroll, they are expensive! These audits usually cripple a business because the penalties are 19%! Do you have independent contractors or are they really employees? Make sure you find out from the start, not 2 years after you started your business!

Give our offices a call at 1-888-466-7566 and to discuss your tax and bookkeeping needs.

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