Private business owners often analyze their financial statements only when it’s time to prepare taxes. However, there is a lot to be gained from monitoring your numbers more regularly and even getting professional input for better results. In this episode, we talk about keeping an eye on the numbers, best record-keeping practices, and the role of a CPA as your trusted advisor.
Today, we are joined by Richard Lindsey, CPA, from Lindsey & Waldo, LLC in Mobile, Alabama.
He has been a CPA for about 26 years, and his focus is primarily on small businesses and individuals; helping them with financial statements, payroll management, tax planning, and tax returns.
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Best Practices in Record Keeping – You will hear about:
- The difference between an accountant and a CPA.
- Working with a CPA across state lines.
- Who is responsible for recording daily transactions?
- Bookkeeping systems: some pros and cons of online solutions.
- How to share data with your accountant.
- Profit, cash flow, and revenue: the similarities and differences in these financial terms.
- How a profitable business could end up with a cash crunch.
- Using financial statements to determine the right pricing model.
So, Let’s get started.
Links
If you have not checked out all of our free resources available to you. Also, Click here for our site.
Here are some of our featured free resources.
- How Can I Organize My Financials?
- Should I Have A Business Plan?
- What Steps Should I Take Towards Branding?
- How Can Marketing Bring In More Clients?
- The Start-Up Checklist
- What Type Of Corporation Should I Be?
- Also, Things that Consider When Scaling A Business
Essential Record Keeping Habits Every Small Business Owner Should Adopt
Maintaining organized financial records throughout the year — not just at tax time — gives you a clearer picture of your business’s health and helps you make smarter decisions. At a minimum, reconcile your bank and credit card accounts monthly so discrepancies are caught early rather than compounding over time.
Separating personal and business finances is one of the most critical steps any business owner can take. Open a dedicated business checking account and use a business credit card exclusively for company expenses. This single habit dramatically reduces bookkeeping errors and makes tax preparation far less stressful.
Document retention is equally important. The IRS generally recommends keeping tax records for at least three to seven years, depending on the document type. Contracts, payroll records, and asset purchase receipts often warrant longer retention periods, so consult your CPA for guidance specific to your situation.
Cloud-based accounting software such as QuickBooks Online or Xero can automate transaction imports, generate real-time reports, and allow your CPA secure access to your books — streamlining collaboration and reducing costly end-of-year catch-up work.