Insights

Starting a small business is an endeavor that requires intentional thought and decision-making. One of the first important decisions you need to make concerns choosing the right business structure. The structure you select influences many things about your business, from the amount you pay in taxes to your everyday operations. And each one comes with its own set of benefits and challenges.

In this blog, we’ll break down the five common types of business entities and the pros and cons of each.

Sole proprietorships

If you’re looking for a business type that’s easy to form and grants you complete control over your business (i.e., the only person in charge), a sole proprietorship is the way to go. You’re automatically considered a sole proprietorship if you perform business activities but don’t register as any other business. Note: Sole proprietors must report earnings on schedule C of their personal returns.

Pros:

• The least expensive—and easiest—to establish.
• As the owner, you keep all profits.
• The tax process is simplified because income is reported on personal tax returns.

Cons:

• Business assets and liabilities aren’t separate from personal assets and liabilities.
• It’s harder to secure business loans or investors.
• Upon death, your sole proprietorship will typically cease operations, and assets become part of your estate.

Partnerships

When owning a business with one or more people, a partnership is the simplest structure to select. There are two common types of partnerships:

• Limited partnerships (LP) have one general partner with unlimited liability (i.e., personally responsible for any loss of the business), while all other partners have limited liability (i.e., liability for debts is restricted to the amount they put into the business).
• Limited liability partnerships (LLP) give limited liability to every owner and protect each partner from debts against the partnership.

Pros:

• Partners bring different skill sets and knowledge to the partnership.
• There is less financial burden for all involved.
• Taxes pass through to the business owners on individual tax returns.

Cons:

• Partners are personally liable for business debts.
• All profits are shared between partners.
• There’s potential for disagreements and partnership disputes.

C corporations

When you form a C corporation (C corp), you’re creating a legal structure where owners or shareholders are taxed separately from the entity. They’re also subject to corporate income taxation, which means business profits are taxed at both the corporate and personal levels (i.e., double taxation).

Pros:

• Personal liability of directors, shareholders, employees and officers is limited; legal obligations can’t become a personal debt obligation of any individual.
• C corps can offer shares of stock, which may fund new projects and/or future expansions. Note: When C corps reach $10 million in assets and 500 shareholders, they must register with the Securities and Exchange Commission (SEC).
• The business has an unlimited lifespan as owners can change, and management can be replaced.

Cons:

• Filing articles of incorporation can be costly and incur greater legal fees.
• Profits are taxed twice—when the business files its income taxes and when profits are distributed as dividends.
• Shareholders cannot deduct business losses on tax returns.

S corporations

Unlike C corps, S corporations (S corps) pass their taxable income, credit, deductions and losses directly to their shareholders, known as a “pass-through” entity. S corps are available only to small businesses with 100 or fewer shareholders.

Pros:

• There are no corporate taxes so there is no double taxation like a C corp.
• Personal assets are protected, as shareholders are not personally responsible for business debts and liabilities.
• Ownership can be transferred without adverse tax consequences.

Cons:

• There are restrictions, such as limiting S corps to one class of stock, no more than 100 shareholders and foreign ownership is prohibited.
• Because amounts distributed to a shareholder can be dividends or salary, the IRS may scrutinize payments more closely.
• There is less flexibility in allocating income and loss because they’re governed by stock ownership.

Limited liability company

Like an S corp, limited liability companies (LLCs) are also “pass-through” entities where business income is part of the owner’s income without a separate tax (i.e., limited liability protection). Owners are typically referred to as “members.”

Pros:

• Members have no liability for acts of the LLC or its other members, meaning personal assets are not at risk in relation to business debt.
• There is flexibility in membership, so members can be individuals, trusts, partnerships or corporations, and there is no limit on the number of members.
• Members can manage the LLC or elect a management group to do so.

Cons:

• LLCs can have higher startup and maintenance costs, as many states impose ongoing fees like annual reports and/or franchise tax fees.
• It’s harder to transfer ownership for an LLC, as all members must approve adding new members or alternate ownership percentages of existing members.
• Because members are considered self-employed, they must pay the self-employed tax contributions toward Medicare and Social Security.

Work with a professional

Selecting the best business structure is a decision that can’t be taken lightly—it impacts your taxes, liability and the ability to grow your company. Think about the risk you’re willing to take and where you want your business to go. Be sure to consult with financial and legal professionals for insight into the business formation that’s right for you. Doing this will help position your business for success.

“How can I help you today?” Chat GPT asks as the cursor blinks below a list of prompts. Maybe you type, “Help me write a social media post for Facebook,” or “Can you write an email to our customers about an upcoming spring promotion of 20% off their purchase?”

As you hit the return key, ChatGPT immediately gets to work, carefully spitting out content to (hopefully) meet your request or asking you for more information to craft the perfect social post or email campaign.

Sounds incredible, right?

While ChatGPT can help small businesses with many tasks, there are also several things to consider if you want to implement artificial intelligence (AI) into your small business. In this article, we’ll cover how to use ChatGPT, along with some caveats and risks to look out for.

Ways to use ChatGPT in your business

From streamlining processes and enhancing operations, small businesses can incorporate ChatGPT in many ways.

• Better customer service and support. Businesses can incorporate ChatGPT into their customer service systems to provide quick responses to questions. This helps reduce response times and can help improve satisfaction and engagement.
• Quick content creation. ChatGPT can help generate content when it comes to social posts, blog posts or product descriptions, which helps save time and resources.
• Enhanced research and analysis. ChatGPT can analyze large volumes of data, like customer reviews, so businesses can better understand market trends and customer preferences.
• Personalized communication. Businesses can use ChatGPT to create customized emails or messages based on the customer’s purchasing history. This helps customers feel valued, which is a great way for businesses to stand out.
• Streamlined operations. ChatGPT can automate repetitive tasks, such as answering FAQs, scheduling appointments or even managing order processes.

ChatGPT enables small businesses to reduce costs and improve efficiency. While those two outcomes sound like a no-brainer when it comes to integrating AI into everyday processes, overreliance comes with significant risks.

The potential pitfalls of using ChatGPT in your business

ChatGPT offers numerous advantages and benefits for small businesses. But it’s important to remember that it can also introduce some caveats. Here are a few things to keep in mind if you want to start using ChatGPT:

• Privacy and security. Small businesses must treat their data—including their customers’ data—with the utmost protection. As with any third party, there’s a risk of sensitive information being exposed through automation.
• Misinformation and limited context. Keep in mind that AI responds to you based upon the data it’s been trained on, and it may be unable to fully understand a complex or nuanced question. Misinterpretations can lead to the spread of misinformation, which can harm your business’s reputation.
• Dependency and overreliance. Businesses that rely heavily on AI can quickly become dependent on their use. If the system fails or encounters issues, your business can become disrupted.
• Lack of human touch. If your business relies on customer relationships and personalized service, incorporating ChatGPT has the potential to move that in the opposite direction. AI doesn’t have feelings and can’t express empathy, which can lead to a lack of personal touch with your customers.
• Regulatory and compliance issues. Depending on your business sector—especially if you’re in finance or healthcare, providing advice or information through AI could violate industry regulations.

If you choose to use ChatGPT in your business, you must make sure that you’re double-checking information or facts produced by AI. While it seems like an answered prayer for AI to develop a quick blog post or financial report, it’s up to you to give it that human touch—and to confirm its validity.

Striking a balance

As with any new technology that promises to move mountains for your business, you must also take it with a grain of salt. No technology is perfect—not even ChatGPT (sorry, ChatGPT, but it’s true). Make sure your business is transparent about the use of AI and let your humans handle complex or sensitive issues that may come up. The key to success is balancing the use of AI with human supervision. AI may do things more quickly, but humans provide the personal touch that customers look for and respond to.

When it comes to financial planning, one of the most common concerns for small business owners is how to reduce taxable income.

The most obvious benefit, of course, is paying less in taxes. However, there are several other strategic and practical advantages of reducing your taxable income, which can, in turn, help you:

• Improve your cash flow. Additional cash can be crucial for day-to-day operations, especially if your business is operating with tight margins.
• Build a safety cushion. The money you save on taxes can help fund emergency savings to withstand economic downturns, market fluctuations and other financial challenges.
• Reinvest in your business. Do you need to purchase new equipment? Hire additional staff? Expand your marketing efforts? Develop new products? Enter a new market? Additional cash can help with any of those goals.
• Plan for retirement. Tax strategies that maximize your contributions to retirement accounts can prepare you for the future and reduce your taxable income.
• Attract and retain employees. The savings realized from tax reductions could be used to enhance your business’s employee benefits, bonuses or salaries.

10 ways you could reduce taxable income next year

As a small business owner, you can use a number of strategies to reduce your taxable income. We should note, however, that tax laws can vary significantly, depending on your location and the type of business you operate. As a result, consulting with a tax professional is always advisable.

Here are 10 common methods business owners use to reduce their taxable income, along with links to IRS information where applicable.

1. Business expense deductions—Ensure that you’re deducting all the legitimate business expenses available to you (and keeping thorough records of these expenses). This includes office supplies, business travel, staff salaries and other operational costs.
2. Home office deductions—If you work from home, you may be eligible to deduct a portion of your home expenses, like utilities, rent or mortgage interest, based on the part of your home you use for business.
3. Retirement contributions—Contributing to a retirement plan can reduce your taxable income. SEP IRA, SIMPLE IRA or solo 401(k) plans are options for small business owners.
4. Health insurance premiums—If you’re self-employed, you might be able to deduct the premiums you pay for medical, dental and some long-term care insurance for yourself and your dependents.
5. Depreciation—If your business buys equipment or property, you can depreciate the cost over several years, which can be deducted from your taxable income.
6. Education and training expenses—Costs for education and training that maintain or improve skills required in your business may be deductible. Also, offering an educational assistance program for your employees now has additional benefits that can help you attract and retain talent.
7. Hiring family members—Employing family members can shift income from your higher tax bracket to their lower one, and you can deduct their salaries as business expenses.
8. Business structure—Sometimes, changing your business structure can result in tax savings. For example, some businesses could benefit from being taxed as an S corporation instead of a sole proprietorship.
9. Tax credits—Take advantage of any tax credits for which your business is eligible. These can include credits for hiring certain types of employees, implementing environmentally friendly practices, or research and development.
10. Investments in technology or equipment—Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment or software purchased or financed during the tax year.

For more information, check out the IRS Small Business and Self-Employed Tax Center, which has a wealth of resources for taxpayers who file Form 1040 or 1040-SR, Schedules C, E, F or Form 2106, as well as small businesses with assets under $10 million.

Keep in mind that as a small business owner, the key to reducing taxable income lies in understanding the tax code and its implications for your specific business. To ensure that all deductions and strategies are legitimate and in line with current tax laws, it’s important to regularly consult with a tax professional who can help you navigate all the complexities and changes—and stay compliant.

Retirement.

It sounds like such a leisurely word, doesn’t it? When you think of retirement, you might envision sunny beaches, road trips or spending as much time as you can visiting your grandchildren (fur kids included). But before those dreams can become a reality, there’s quite a bit of planning to be done.

Making sure your employees have a tidy nest egg to begin their golden years is both a joy and a responsibility. Providing the right benefits, particularly in the form of retirement accounts, can help your employees start their retirement path on the right foot. Not only does it help retain and attract quality employees, but it can also provide tax advantages for your business.

Let’s explore the options available and the considerations small business owners should keep in mind.

Available retirement account options for employees

Choosing the right type of retirement account can feel like hunting for buried treasure. Let’s uncover the retirement options available to you and your employees.

1. Simplified Employee Pension (SEP) IRA. Think of SEPs as The Three Musketeers: All for one, and one for all. This option is great for self-employed individuals, freelancers and small business owners. For 2023, the contribution limit is the lesser of 25% of each employee’s salary or $66,000.
2. Savings Incentive Match Plan for Employees (SIMPLE) IRA. For businesses with 100 or fewer employees, the SIMPLE IRA lets both employers and employees contribute. For 2023, employers can either match employee contributions (up to 3% of the employee’s compensation) or make a fixed 2% contribution for all eligible employees. Employee contributions can’t exceed $15,500.
3. 401(k) plan. Often considered the gold standard of retirement plans, 401(k) accounts are an option for any business, including self-employed individuals. For 2023, employees are limited to contributing $22,500, with an additional $7,500 for catch-up contributions (for those age 50 or over). Total contributions (employee and employer) are limited to the lesser of 100% of employee compensation or $66,000.
4. Profit-sharing plan. As the name implies, these plans allow employers to share a portion of the business’s profits with their employees. For 2023, contributions cannot exceed 100% of an employee’s salary or $66,000. If also participating in a 401(k), contributions can’t be more than 25% of the compensation paid or accrued during the year.

Potential pitfalls to consider

While charting the course of retirement benefits offers numerous advantages, it’s important to be aware of potential challenges. Let’s delve into some complexities and considerations business owners and employees may encounter.

For business owners

• Administrative costs and responsibilities. Offering retirement benefits, especially 401(k) plans, can introduce significant administrative tasks, like record-keeping, regular compliance testing and mandatory filings.
• Fiduciary duty. When you sponsor a retirement plan, you have a fiduciary duty to act in the best interest of plan participants. You’ll need to carefully select and monitor investment options to ensure fees are reasonable.
• Cost implications. While retirement accounts can offer tax advantages, they also come with costs, including setup fees, annual charges and other administrative expenses.
• Vesting schedules. Plans that include an employer match often have vesting schedules. If an employee leaves before they’re fully vested, they run the risk of forfeiting a portion of the employer’s contributions.
• Plan termination. If you decide to end the retirement plan, there are processes and potential costs associated with terminating a plan properly.

 For employees

• Investment risks. Employees have the responsibility of choosing their investments within a retirement account. Without the proper guidance, they may fail to diversify properly, which could potentially jeopardize their retirement savings.
• Limited liquidity. It’s essential for employees to understand that most retirement accounts are designed for long-term savings. Early withdrawals can lead to additional taxes and penalties.
• Fees. Some retirement plans require associated fees with their investment options. High fees can erode investment returns over time, so it’s important to be aware of this when choosing investments.
• Vesting schedules. As mentioned, if employees leave before they’re fully vested, they may not get the full benefit. This can be frustrating for employees who may leave before they reach a vesting milestone.

Conclusion

Offering retirement accounts to your employees is a commendable and strategic decision for any small business. While there are many benefits, it’s important to navigate the retirement plan terrain with as much information as possible.

Consult with a financial professional so they can guide you on the best options for your specific business model and make sure you’re not only supporting your employees’ future—but also securing the financial health of your business.

In a society based on consumerism, there will usually be debt. That’s certainly true in the United States, where total household debt rose to an average of more than $17 trillion in the third quarter of 2023.

Because there’s more than one type of consumer debt—credit card, mortgages, auto loans and student loans, just to name a few—there are more ways for you to get into debt. But too often, when you’ve got more money going to pay off your balances than landing in your savings account, you’re left trying to figure out how to get out of debt.

But…isn’t the idea of financing your debts to make your payments more manageable? Well, yes, but paying off debts as soon as possible instead of spreading them out over time is a good strategy for a number of reasons, as you’ll:

1. Save on interest. The longer you carry debt—especially high-interest debt like credit card balances—the more interest you pay. Paying your debt off more quickly can significantly reduce the total amount of interest you pay out.
2. Improve your credit score. High levels of debt can negatively impact your credit score. Reducing debt can improve your credit score, which is beneficial for future borrowing needs, like a mortgage or car loan.
3. Enjoy more financial freedom. The money spent on debt payments could otherwise be used for savings, investing for retirement, building an emergency fund, or personal or family needs.
4. Avoid the debt trap and other negative consequences. Making minimum payments can lead to a situation where you’re mostly paying off interest without making much progress on the principal. This can trap you in a cycle of debt and lead to defaults that can damage your credit score and financial reputation.
5. Reduce financial stress. Debt can be a significant source of stress and anxiety. Eliminating or reducing debt can lead to greater peace of mind and a sense of financial security.

Paying off debt can also help you gain financial discipline and encourage better budgeting, spending habits and an overall more responsible approach to managing finances.

So, where do you start?

There are two popular strategies for paying off debt: the snowball method and the avalanche method. They differ in their approach to prioritizing debt, but both methods are effective, and you can choose based on your personal preference and financial goals. Let’s take a look:

Method 1: Snowball

Prioritization: Debts are ordered from the smallest to the largest balance, regardless of interest rates.

Motivation: The focus is on psychological wins. By paying off smaller debts first, you experience quicker successes, which can motivate you to keep going.

Process:

1. You make minimum payments on all your debts except the smallest.
2. Any extra money is put toward the smallest debt until it’s paid off.
3. Once the smallest debt is paid, you roll the amount you were paying on that debt into the next smallest debt, creating a “snowball effect.”

Interest consideration: Less emphasis on the interest rates; you may end up paying more in interest over time compared to the avalanche method.

Method 2: Avalanche

Prioritization: Debts are ordered from the highest to lowest interest rate, regardless of the balance.

Cost efficiency: The focus is on saving money on interest payments. By paying off your high-interest debts first, you reduce the total interest paid over time.

Process:

1. You make minimum payments on all your debts except the one with the highest interest rate.
2. Any extra money is put toward the debt with the highest interest rate until it’s paid off.
3. Once that debt is paid, you roll the amount you were paying on that debt into the debt with the next highest interest rate.

Psychological aspect: Requires more discipline and patience; it may take longer to pay off the first debt, especially if it’s a large balance.

Snowball vs. avalanche: Key differences

Focus: Snowball focuses on quick psychological wins and simplifying the number of debts. Avalanche focuses on reducing the overall interest paid.

Interest rates vs. balance size: Snowball ignores interest rates in favor of paying smaller balances first, while avalanche prioritizes high interest rates, whatever the balance.

Long-term cost: Avalanche typically results in lower total interest paid. Snowball, however, can offer more immediate gratification and motivation.

Conclusion

In choosing between the two methods, think about what motivates you more: The quick wins of paying off small balances with the snowball method, or the more logical approach of saving on high-interest payments with the avalanche method. Both methods are effective, and which one you choose depends on your personal preference, financial goals and individual circumstances.

Just keep in mind that while paying off debt as quickly as possible has a lot of advantages, it’s also important to consider your overall financial situation. This includes having an emergency fund in place to help you avoid going back into debt as a result of unexpected expenses, and balancing debt repayment with other financial goals and commitments.

It’s time to take your first step into a debt-free future—and we know you’ve got this!

What is a credit score?

The short answer: It’s a number that represents your creditworthiness.

A longer answer: Your credit score is calculated based on an analysis of your credit files and is used by lenders to assess the risk associated with extending credit to you. Scores typically range from 300 to 850, depending on the scoring model used (e.g., FICO or VantageScore), generally categorized as follows:

• Excellent: 750 and above
• Good: 700-749
• Fair: 650-699
• Poor: 600-649
• Bad: Below 600

“But wait,” you might say. “I don’t need any loans. So why does my credit score matter?”

Well, you don’t need any loans today. And you might not need to get a new job today, either. But it’s impossible to see the future, and your credit score can play a significant role in that future. So, your credit score does matter, because it can play a decisive role in whether you get:

• Lower interest rates on loans. Individuals with higher credit scores are typically seen as lower risk. As a result, they often qualify for lower interest rates on mortgages, car loans, personal loans and credit cards.
• Mortgage and rental approvals. When you apply for a mortgage or try to rent an apartment or other property, the lender or landlord may check your credit score. A poor score could lead to a denial or require a larger down payment or security deposit.
• A lower insurance premium. Some insurance companies use credit scores to determine auto and homeowners insurance premiums. The higher your credit score, the lower your premium could be.
• Your ideal employment opportunities. Some employers check potential employees’ credit as part of the hiring process, especially for positions that deal with money or sensitive information. A poor credit score could influence an employer’s hiring decision.
• Lower security deposits. Utility and telecom companies may check your credit score when you establish service. A low credit score could result in the company requiring a higher deposit.
• Negotiating power. A high credit score may give you more leverage when negotiating terms on loans or credit cards.
• Business financing. For entrepreneurs and business owners, a good personal credit score can be critical in obtaining business loans or lines of credit—particularly for new businesses without an established credit history.
• Peace of mind. A good credit score shows that you’re managing your financial obligations well and can be a source of pride and confidence in your financial life (not to mention a stress-reducer).

Monitoring your credit score can also be an essential part of personal financial management. It can help you understand how your financial behavior affects your creditworthiness, and it can help you make more informed decisions.

More information on credit scores

Credit scoring models vary, but most commonly, they’re composed of the following elements:

• Payment history (35%): Whether you’ve paid your credit accounts on time. Late or missed payments can significantly impact your score.
• Credit utilization (30%): The ratio of your outstanding credit card balances to your credit card limits. High usage can negatively affect your score.
• Length of credit history (15%): How long your credit accounts have been active. A longer history can positively influence your score.
• New credit (10%): The number of recently opened credit accounts and hard inquiries (i.e., when you’ve applied to a lender for a loan). Too many new accounts in a short time can hurt your score.
• Credit mix (10%): The variety of credit types you have: credit cards, mortgage loans or personal loans. A diverse mix can positively impact your score.

If your score is currently lower than you’d like, don’t despair. You can improve your credit score by:

• Paying your bills on time.
• Keeping your balances below 30% of your credit limit.
• Not opening too many new accounts at once.
• Regularly checking for errors on your credit report.

If you do find errors on your credit report, you can dispute them with the credit reporting agency.

Where can you access your credit score and credit report? In the United States, you can request a free credit report from one of the three major credit agencies (Equifax, Experian or TransUnion) once a year. Your financial institution may offer access to your credit score for free; check with your credit union or bank for details. There are also a number of credit monitoring apps that can help you keep track of your credit—and some, like Credit Karma or Mint, are free.

Just be sure to remember that, for all the reasons stated above, your credit score does matter and can significantly influence many aspects of your financial life. Understanding your score and taking steps to improve or maintain it will give you financial benefits and peace of mind for years to come.

We live in a data-driven world. And because data is so readily available, businesses have the ability to tap into key metrics to measure against set goals. Whether those goals are to reduce staff turnover or client churn, increase profits, or extend the average client life cycle…having a KPI (key performance indicator) strategy in place is essential for long-term success.

While data tracking and monitoring key metrics is critically important to business success, the abundance of data available can cause information overload. To help you navigate the world of KPIs and build a “starter plan” of sorts, this article offers three tips to creating a sound KPI strategy.

#1 – Choose the right KPIs

Not all KPIs are created equal. The first step is to understand the difference between lagging and leading indicators and why both need to be monitored.

Lagging indicators show results over a period of time (e.g., total sales in the closing quarter). These are easy to measure and provide quick answers on whether set goals have been met. For example, if you set an ambitious goal such as doubling sales by the end of Q4 (compared to Q2 sales), the ultimate lagging indicator is annual revenue or profits.

Leading indicators capture data that has an effect on an outcome. This makes leading indicators useful for predicting outcomes. For example, if an online retail store shows a sharp drop in the purchase of a popular item, the company could predict a drop in overall quarterly sales. Monitoring leading indicators helps you get ahead of predictable trends and make adjustments to influence positive outcomes.

#2 – Foster a KPI-driven culture

The goal here is to get your entire organization talking about data! When everyone speaks the data language, it better supports a company-wide KPI strategy.

To build a KPI-driven culture, be sure to offer regular staff training on the value of KPIs and the metrics each department is responsible for tracking. Also, be sure to assign the proper leads to champion KPI progress and ensure staff are kept updated as your strategy evolves. Finally, make sure you have the right technologies in place to collect and analyze data, and make KPI dashboards available to required staff.

#3 – Implement a process for KPI refinement

It’s important to understand that KPIs are subject to change. You can bet that over time customer behaviors will change and business goals will evolve in response to market trends. This calls for businesses to refine their KPI strategy on a regular basis.

Over time, you may discover that a KPI is not helping you progress toward a specific goal or that it’s driving the wrong actions. For these reasons, commit to consistent KPI evaluation and enhancement as you move forward. The formal process of refinement requires you to monitor what is working and what is not.

Need help with KPIs? Contact us today! Simply click here to CONTACT US and complete the brief form or give us a call. We are here to help.

Whether you own a business or work in one, accurate tracking of your business expenses is a necessity. If you’re a small business owner, tracking is essential for understanding your financial position, budgeting, forecasting and fulfilling your tax obligations. If you’re an employee, it’s vital to keep your expense tracking accurate and up to date for reimbursement and tax deductions.

Here are some practical tips to help you effectively track your business and job-related expenses.

For everyone

1. Keep all your receipts. Your receipts are essential for reimbursement and—in the case of a business owner—tax purposes. So, whether it’s lunch with a client, office supplies or a plane ticket to a business conference, keep all your receipts. If you don’t have an expense-tracking app and hate keeping track of paper copies, you can store digital copies on your smartphone by taking photos or using a scanner app.
2. Categorize your expenses. Group your expenses into categories (e.g., rent, utilities, office supplies, travel, meals). This will make it easier when it’s time to turn in your expenses for reimbursement or to complete tax returns.
3. Set up a regular review routine. To help you catch any errors before they cause an issue, make it a habit to review your expenses on a regular basis (i.e., weekly or monthly).
4. Understand tax-deductible expenses. Knowing what can and can’t be deducted is key to maximizing tax benefits. Especially if you’re a business owner, it’s a good idea to consult a tax professional to be sure you’re taking advantage of all available deductions.
5. Separate business and personal expenses. If possible, use a separate credit card or bank account for your business-related expenses to minimize confusion at tax time. If you can’t use a separate account, make sure to clearly mark and categorize work expenses in your records.

For small business owners

1. Use accounting software. QuickBooks®, Xero and FreshBooks are just a few of the accounting tools designed to make tracking expenses easier. They can connect to your bank account, categorize expenses and provide insights into your spending.
2. Use mobile expense tracking. Mobile expense tracking apps that allow you to input expenses and capture receipt images quickly and easily are a great way to record and organize expenses—especially if you’re constantly on the go.
3. Implement an expense policy. If you have employees, create a clear policy that outlines how expenses should be recorded and which expenses are acceptable.
4. Consider hiring a professional. Has your business grown to the point where tracking expenses has become too complex? You may want to think about hiring an accountant or a bookkeeper.
5. Stay alert. Keep an eye out for anomalies and inconsistencies. Unusual expenses could be a sign of errors or fraudulent activities.

For employees

1. Understand your company’s policy. Take time to familiarize yourself with your company’s expense policy, so you know what can be reimbursed as well as the process for submitting expenses.
2. Record expenses as they happen. It’s easy to forget about an expense if you don’t record it immediately. Make a habit of logging your expenses as soon as they occur.
3. Provide detailed descriptions. For every expense, include detailed notes explaining the business purposes. Some people prefer to jot the information directly on the receipt if there’s room. This information can be essential for both reimbursement and tax purposes.
4. Keep receipts for the appropriate length of time. Depending on your location and situation, you may need to retain your expense records for a specific period of time. Check with your tax preparer to see what you should keep…and for how long.
5. Consider tools for travel. If you frequently travel for work, look for apps and tools designed specifically to manage travel expenses like mileage, accommodations or per diems.

By keeping detailed, organized records on the go, you’ll be ready when it’s time to submit your expenses for reimbursement or file your tax return. And you’ll be able to relax, knowing that you’ve put in the work upfront to make the process of tracking business or job-related expenses more efficient and stress-free.

Whether you’ve been a small business owner for a decade or you’re considering starting a business, you can never have enough information to help you through the ups and downs of being your own boss. That’s why we’ve created a list of 15 popular business-related books—some general, some money-related and some geared especially toward female entrepreneurs—that are worth adding to your small business bookshelf.

• Good to Great: Why Some Companies Make the Leap…and Others Don’t by Jim Collins—What are the universal distinguishing characteristics that cause a company to go from good to great? This book provides valuable insights into leadership, strategy and building a successful organization.
• Grit: The Power of Passion and Perseverance by Angela Duckworth—To go into business for yourself is to experience ups and downs all along the journey. It takes a combination of passion and long-term perseverance, or “grit,” to drive success. This book shows how grit—not talent or luck—makes all the difference.
• Start Your Own Business: The Only Startup Book You’ll Ever Need by the staff of Entrepreneur Media—This practical and timely guide from the staff of Entrepreneur magazine and Entrepreneur.com covers how to plan, market and maximize profits during your first three years in business.
• The 4-Hour Work Week: Escape the 9-5, Live Anywhere and Join the New Rich by Timothy Ferriss—Ready to live more and work less? This book challenges traditional notions of work and productivity, offering strategies for increasing efficiency, automating processes and achieving a better work-life balance.
• The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It by Michael E. Gerber—A business classic, this book explores the common myths and misconceptions about starting and running a small business. It offers insights into the importance of systems, processes and the role of the entrepreneur.
• Purple Cow: Transform Your Business by Being Remarkable by Seth Godin—A cult classic, this book focuses on the importance of standing out in a crowded marketplace. It encourages businesses to be remarkable, unique and provide exceptional value to their customers.
• She Means Business: Turn Your Ideas into Reality and Become a Wildly Successful Entrepreneur by Carrie Green—The founder of the Female Entrepreneur Association offers valuable guidance to help you get clear on your business vision, create your brand, manage your time and focus, and move past fear and doubt.
• Strategize to Win: The New Way to Start Out, Step Up, or Start Over in Your Career by Carla A. Harris—Invaluable for new entrepreneurs or anyone contemplating a career change, this book gives readers the tools they need to get unstuck, redirect momentum, position themselves, and get started managing their career or business.
• The Art of the Start 2.0: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything by Guy Kawasaki—This book provides guidance for entrepreneurs and small business owners on starting and launching a business. It covers topics such as pitching, raising capital and marketing.
• The Confidence Code: The Science and Art of Self-Assurance—What Women Should Know by Katty Kay and Claire Shipman—The authors connected with the world’s leading psychologists to show how, by acting on our best instincts and daring to be authentic, women can feel the transformative power of confidence.
• Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine by Mike Michalowicz—This book presents a cash management system for small businesses, emphasizing the importance of allocating profits first and managing expenses accordingly. It also provides actionable steps to improve financial health.
• The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses by Eric Ries—Inspired by lessons from “lean manufacturing,” this book provides a scientific approach to creating and managing successful startups, in an age when companies need to innovate more than ever.
• Lean In: Women, Work, and the Will to Lead by Sheryl Sandberg—An international bestseller, this book combines personal anecdotes, hard data and compelling research to change the conversation from what women can’t do to what they can—and how men can benefit by supporting women in the workplace and at home.
• Start with Why: How Great Leaders Inspire Everyone to Take Action by Simon Sinek—This book emphasizes the importance of understanding and communicating the purpose behind your business—the “why.” It explores the concept of inspiring others by starting with the “why” rather than focusing solely on the “what” and “how.”
• Crushing It!: How Great Entrepreneurs Build Their Business and Influence—and How You Can, Too by Gary Vaynerchuk—Explore the power of personal branding and leveraging social media platforms to grow a business. This book provides strategies, case studies and practical tips for entrepreneurs in the digital age.

Remember, while reading books alone won’t guarantee your success, the right books can provide valuable insights, inspiration and strategies that you can apply to your small business—and perhaps even to your life outside the business. Here’s to happy and productive reading!