Monday, August 22, 2011

Paying Cash for Business Expenses

This is not necessarily a good idea, unless you have a Petty Cash account set up.  

As a small business owner, if you withdraw cash from your bank through the ATM, or inside the bank with a check and then pay for business expenses with the cash it may be impossible to prove that the money you withdrew was not a draw.  

I definitely have to advise against paying for anything major with cash.  Paying for improvements, equipment, rent, etc with cash is a good way for the person you paid to either come back and say that you didn't pay them (since there is no paper trail), or for you to claim it on your taxes as a business expense (since you most likely do not have a W-9 from them and cannot file a 1099).

Just a few things to think about before paying for your purchase with cash.

You can check out my website for more information or to contact me for additional topics.

www.kdhbookkeeping.com


1 comment:

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