Given its small size of just three employees, Sound Innovations relies on a program like Quickbooks to keep track of all invoices and work performed to avoid end-of-year headaches when prepping for tax season. Onate noted that as long as everything is entered properly and correctly, the program works well for him. Staying on top of things and recording data accurately is essential. Ben Vollmer of BusinessWorx echoes the same advice, encouraging owners to talk with their CPA or tax preparer on a regular basis. “Prepare ahead of time. That’s the number one thing most people don’t do. Talk to them,” he stressed. “Our meeting was on a quarterly basis. It cost $150 every time I did it, but it saved me at the end of the year. The biggest mistake people do is wait until March to figure out last year’s taxes. Get on that way more often in a more predictable schedule.” While the business is small, Sound Innovations must remain just as prepared for taxes as any other larger company. “I don’t have employees that do sales, just installations. I’m the only one who handles customers,” Onate said.
“Administrative, phone calls, emails, it’s all me. Employees are hourly. They clock in. All jobs are calculated hours on a sheet indicating how many hours, and materials used. They give it to me and I prepare the invoice for the customer based on that information.” And all information must be recorded correctly for tax purposes. “You really want to be looking at your financial information through the year and your accountant should be able to keep you apprised of what the likely tax liability will be,” Dunlap explained. “Also, they should advise you of some opportunities to plan to minimize your taxes as well.”
Impeccable Records It’s important to keep things organized, but what happens when the business grows beyond basic bookkeeping? The larger the business, the more complex the tax situation becomes. Onate may not
have as much to record as other mobile electronics retailers who handle more involved events or sales. “Being different than most stores out there, we are a little more on the specialized side. Even though we’re retail, we’re boutique-oriented with high-end clientele. I don’t do sales or special events,” Onate said. “I don’t do traditional semi-annual sales, Christmas, or Black Friday. People come for our reputation and service, not for pricing. If they’re looking for the best price, we’re not their store. If they’re looking for quality, they’re here for that reason.” While Onate doesn’t need to consider special events for the business’s taxes, there are some special expenditures that need to be recorded, such as manufacturer trainings. “Recently, I had an employee go to Arizona for a seminar,” Onate said. “I paid for his flight and travel expenses. It was entered into QuickBooks as a travel and
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