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Keep good records for a cash-intensive business

12/28/2015

1 Comment

 
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Do your business transactions involve a lot of cash? Because cash transactions are, or can be, anonymous, the IRS takes a special interest in "cash intensive" businesses. One indication of this interest is the "Cash Intensive Businesses Audit Techniques Guide" developed by the IRS. The goal of the guide is to assist IRS examiners in identifying specific issues, business practices, and examination techniques for businesses that primarily deal in cash.
What does that mean for your business? A cash business is generally not required under tax law to use a specific type of bookkeeping method. Still, the added scrutiny means you'll want to be particularly careful about maintaining books and records that accurately reflect your income and expenses. Here are three suggestions to get you started.
  • Maintain original source documents. Sales invoices and cash register tapes are records that support the amount of income received. Tie these totals to your bank deposits. Remember to track income from electronic transactions, including digital currency, as well as non-cash activity such as bartering.
  • Support non-income cash inflows. Document loans you make to the business with written promissory notes. Keep records of amounts you receive in the form of refunds, rebates, and insurance policy payouts.
  • Practice good internal control. Internal controls are the processes you put in place to maintain the integrity of your accounting information. For example, having more than one person involved in receiving and recording income can help minimize the risk of errors or inadvertent misreporting.

Please call us for more recommendations and guidance on establishing and maintaining a bookkeeping system that can help you support the income and deductions you report on your tax return.

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.   
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain.Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Online Advisor Newsletters, Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.
Art Bradley CPA & Janice Papais CPA 
   
Monarch Accounting Group
​145 Tower Drive, Suite 4

Burr Ridge, IL 60527
Phone (630) 320-3720

1 Comment
Ian Horn link
3/28/2017 12:10:34 am

It is always good to keep the record of all the business details, especially it is more important in cash intensive business. Honestly I can say that the whole content of your blog is completely an unique concept for me. But I genuinely like the third point that is practicing with good internal control very much. Because more cash flows always gives a chance to maximize the occurrence of errors. So, good internal control is on of the best way to reduce it.

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Phone: (630) 320-3720

Monarch Accounting Group Inc
145 Tower Drive, Suite 4
Burr Ridge, IL 60527-7836
Email: Info@MonarchAccountingGroup.com


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  • Home
  • Solutions
    • CFO Services
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    • QuickBooks Training
    • Income Taxes
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    • SmartVault
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    • Tax Organizer
    • Record Retention Schedule
  • Reviews
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  • Blog
  • Contact Us