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Financial Forensics

Image from Landmark Business Solutions

I recently set up QB for a client and over the course of entering and reconciling a years worth of data I found that 40% of the information I entered was found on bank statements.   She thought she was a great hoarder of receipts, but that was not the case. The main culprit was online transactions.

We live in an electronic era.  Not all of us get around to printing out the email or invoice related to the online transaction.  The good news is that there is a paper trail related to these transactions on your bank and credit card statements. The key is to link these transactions to expense categories when your statements come in to maximize on tax write-offs.   One of my clients provides me with annotated credit card and bank statements so I can match up the transactions with an expense category.  It’s worked pretty well so far.
Another unsolved mystery to work through is cash transactions.  In this case we aren’t so lucky.  There is no back up system to figure out the difference between cash earned and cash deposited when you don’t keep track.  If you are bad at keeping receipts, make a point of depositing your cash ASAP.  Use your business credit or debit card instead of cash.

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