SMALL BUSINESSES & PAYROLL…..PT 2
Why, NOT paying Yourself, Business Owner is a Problem!
Payroll can be a problem. Most payroll companies are equipped to serve larger companies. However, everyone needs payroll. Some small companies opt to pay people without tax deductions; that’s a tricky and could be costly fix for the company as well as the employee; not to mention potential legal issues that this type of practice can cause for the company.
Additionally, as the owner of the business, it is helpful to pay yourself a salary and in some cases based on your setup, illegal to not do so.
Establishing a company name, getting an EIN, getting a business license are just a few steps toward starting your business and probably some of the easiest steps one could take. The other steps in starting the business include deciding how much separation should be between you and your company. Financially, if you aren’t separated from your company enough, everything you do or attempt to do personally affects the business and vice versa.
One of the things, I discuss with clients is ensuring that they pay his or herself depending on their status, future personal goals as well as future professional goals. When your salary is just you, the owner, using the account to pay your bills, cash flow is damaged and/or abused. You will lose money through missed opportunities because you will be handling personal expenses out of the business revenues.
There should always be degrees of separation in a business for an entrepreneur to prosper and grow in all areas. Despite the rumors, ideas and thoughts for tax purposes, one must never forget that he or she isn’t in business to pay taxes but in business to make money. There are boundaries, limits and responsibilities for running your business and paying yourself as the entrepreneur is a crucial step.
Elite Expert is a business coach that specializes in effective bookkeeping and works with clients of all sizes to assist them in finding their salary amounts and growing the company.
Call today, accepting serious clients only.
