Starting a new business?

Welcome aboard!

This is a journey that can be truly rewarding in every sense, provided you plan and strategize wisely and carefully. And one of the earliest stages of planning and strategizing in business entails, planning a budget. Before you can make money, you’ve to figure out where you’ll be spending it. It’s a basic tenet of business – to generate income, you first have to spend.

Where the money will be spent? How much of it will be spent? All this comes under budget planning.

The areas where you need to spend money are collectively referred to as expenses. It’s vital that when planning a budget for your business, you must account for all the expenses that you expect to incur in the running of your business like accounting and taxation services. It helps you to gather resources in accordance to keep you on track, while also gives you an idea about the opportunities that you can leverage in form of deductibles and run your business more profitably.

Where every business has different types of expenses, some expenses are common to all and they must be accounted for in every budget planning exercise. These expenses are as follows:

Location Costs

This is one of the major ongoing costs associated with running a business—unless you already own the property under your complete ownership. It exists in the form of rent or mortgage.

Location expenses are deductible if:

• It’s a mortgage. As such, the interest on mortgage is deductible.
• It’s a lease. As such, you can deduct all the costs associated with a lease.
• It’s a home business location. As such, you can deduct some of the costs associated with your home, based on the space that is exclusively used for your business purposes.

Utility Expenses

Utilities are a must for any business. Telephone, water, electricity, gas, sewer – you’ve to pay for all these utilities if you’re running a business.

Generally, utility expenses are not deductible, but those utilities that are directly served in your manufacturing operations are tax deductible in most states.

Insurance Expenses

Every business needs several types of insurance policies. In some cases, the requirement might be imposed by law. To acquire an insurance, you’ve to pay premiums. This could be on monthly, quarterly or annual basis depending on the terms of the agreement.

Salaries, Wages and Benefits

If you run a business, you’re likely to have employees. You need to pay them salaries and wages according to the set payroll system, as well as any benefits that they’re entitled to receive. Some of these benefits may be tax deductible.

Business Association Fees

For any business, credibility matters. It’s the first thing that customers look for. One way a business can establish credibility in market is by enrolling in a professional association or a business group as a member. This linkup involves fees which business owners have to pay.

There are other expenses as well that haven’t been included in this list for they may not be common for all types of businesses. Make sure you consult a professional to get a tailored guidance for your individual case and whether those expenses are tax deductible or not.

Looking for a small business consultant in Deerfield Beach?

A&B Accounting and Business Solutions can help you. We provide friendly, supportive business consultancy services to small business in Deerfield Beach and other parts of South Florida. Over the years, we’ve helped many clients optimize their business operations and maximize their tax savings through our consultancy services. If you need any advice on any aspect of your business operations, feel free to reach out.