Newcomers to the buy-sell storage auction business often overlook the importance of keeping good financial records. It’s not until tax time rolls around when they realize just burdensome accounting can be. The good news, however, is that you can make the process a little easier by following some simple accounting and finance tips, which we’re going to discuss today.
Keep Personal and Business Expenses Separate
If you’re looking to earn revenue from the buying and selling of property at storage auctions, you’ll need to treat it as a business. This means keeping your personal expenses separate from your business-related expenses. Granted, it’s probably easier to use your personal credit card to rent a van or purchase cardboard boxes, but this is a bad habit that will only make your taxes that much more difficult. If you need to purchase something that’s related to your commercial endeavors, place it on a business credit card.
Keep Records of Purchases
In addition to separating your personal and business expenses, you should also keep records of all business-related purchases. Whether it’s a $5 or $500 expense, you should maintain a record of every purchase made for your business. Assuming you pay with a credit card, you should have a paper trail. As we talked about before, however, most self-storage facilities only accept cash payments for auctions, meaning you won’t have a paper trail — not in the form of a monthly statement, at least. Instead, make sure the self-storage facility provides you with a receipt, indicating how much you paid for the unit.
Make a Backup of Records
There’s an old saying that goes hope for the best but prepare for the worst. Hopefully, nothing will happen to your original financial records and documentations. But if it does, you should have a backup copy in place. Try to get into the habit of creating regular backups of your storage auction business’s financial records, storing them on a different computer or device as your original records.
When in Doubt, Seek Professional Help
Because taxes and small business finance laws vary from year to year, it’s recommended that you seek professional assistance if you have any questions. Investing in the services of a certified personal accountant (CPA) can prove to be well worth it, as they’ll uncover hidden deductions to help you maximize your net profits while continuing to grow your business.