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In the previous post, I shared that owners of an S Corp have to receive a reasonable amount of compensation (payroll) before drawing money. How do you run payroll for yourself?? Running payroll is more complex than just drawing money out...

If you own an S Corp, you may know that there are benefits to electing an S corporation. Did you also know that the IRS generally requires you to pay the owner(s) through payroll before drawing money from the business? This is because of...

If you own an S Corp, you may know that there are benefits to electing an S corporation. Did you also know that the IRS generally requires you to pay the owner(s) through payroll before drawing money from the business? This is because of...

If you are a business owner, I'm sure that you've heard about the term "S Corp" many times! But do you know what it is? Many people think that S Corp (a short form of S Corporation) is another entity type similar to LLC or Sole Prop, but...

Before the bookkeeping side, I think that it's good to note the legal side of things. Commingling funds may make it harder to draw a clear line between personal and legal funds. No one would like to have legal claims, but commingling fun...

When an owner takes money out of the business, the transaction should be categorized as owner's draw in EQUITY section. Same when business credit card or debit card is used for personal expense.

Many businesses use credit cards. Using credit cards is convenient and helps manage cash, and there are other benefits to using credit cards such as getting cashback rewards. How do you record cashback rewards in your books? Here, the fo...

✏️ Fixed cost is an expense that businesses incur to run the business, but the amount stays the same regardless of the volume of sales and production. Example: office rent, rent for warehouse, depreciation expense, insurance, and monthly...

How to record a loan payment correctly in your books? Record interest portion to expense and principal portion to loan payable.