Hello, I recently acquired a client that started his Window Tinting business in June 2017. His quarterly taxes are due (well overdue now) and he wants me to file for him. He is using his business account for everything. He has not reconciled any bank statements to his checkbook ever. I am stuck as to where to begin. I mean I had him print me a copy of his monthly bank statements. I have copies of most of the sales invoices (income), I have his purchases (both personal and business), I have deposit slips, atm withdrawl, and money order receipts for rent (personal and business). Should I try to reconcile his bank account first? And then separate his business from his personal? I mean just where do I begin. Please help me.
USA Client uses business account for personal and business
- Thread starter unique67
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If he is a sole proprietor or partnership welcome to the real world. If he has a limited partnership or corporation, intermingling funds is a definite violation of the limited liability protection.
Assuming he does not have limited liability protection no need to reconcile accounts. You just need a profit and loss as well as any fixed assets acquired for business operations, and a summary of items deductible for personal reasons.
Assuming he does not have limited liability protection no need to reconcile accounts. You just need a profit and loss as well as any fixed assets acquired for business operations, and a summary of items deductible for personal reasons.
Steve-LevelUp
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What I have done in the past is started with the bank statement. As Drmdcpa has stated, the intermingling of funds is a no-no, but presuming he is a corporation, it will be easier (long term) to complete a full bank rec and identify the personal expenses, and record those as a withdraw/wages from the company, with the remainder being real expenses.
However, there really are many ways to approach it, i just find the bank rec one of the simplest.
However, there really are many ways to approach it, i just find the bank rec one of the simplest.
A Ltd has bought a van for company B Ltd as A Ltd benefited from a scheme. All the deposit, final balance and registration fees were paid by B Ltd, the leasing fees were issued on A Ltd. All future repairs,maintenance, servicing will be paid by B Ltd as they will use it fully. The van invoice is on A Ltd. B ltd will have to refund the monthly leasing payment to A Ltd. Thanks for advising how company B will account for all this.
