Keeping the books for any business involves many of the same procedures. It's the type of income and expenses that change with each business. This article is a brief summary of some of the important points on how to maintain the business records for a flower shop.
In keeping the books for a flower shop, begin by getting a ledger when you start the business, so you can record the expenses and the income. Office supply stores carry a ledger in which you can record all your transactions daily and the monthly totals are accumulative. At tax time everything is already figured and you won't have to search for anything. If your finances allow it, use a good bookkeeping software program such as Quick Books. Everything is automatically calculated. All you have to do is print it.
A brick and mortar flower shop will have overhead costs. These will be the rent or mortgage payments on the building and land, and any utility services you use. There may be other expenses for such things as refrigeration equipment.
The initial start up costs should be deducted on the first year's income tax return. This can include business licenses, and all the things needed to begin business, such as cash register, calculator, shipping and packing materials, flowers, vases, seeds and bulbs.
After start up it's very important to record your daily and monthly transactions. These will include sales, new purchases, and incidental expenses. All receipts must be kept for three years for income tax purposes. Keeping a running accumulative total will allow you to easily prepare any financial statements needed at any time.
The bookkeeping term of FIFO is the best plan to follow. FIFO stands for "first in - first out," which means selling the older products first. In conducting a flower shop this principle is essential due to the short life expectancy of cut flowers. Potted plants etc., can be expected to last much longer, sometimes forever.
Taxes are very important in any business, particularly a retail business. If your state imposes a retail sales tax, then you must keep very thorough records of all sales transactions on which you collected tax from the customer. The sales taxes are paid in whatever manner you initially set up for your business structure. The state may require that you to file monthly or quarterly sales tax returns. Having complete records of sales makes this chore a lot less difficult.
If you create an end of the year financial statement for the business it will be a tremendous help when you prepare your Federal Income Taxes. The simplest way to do this, if you aren't using software is to get a "Simplified Weekly Bookkeeping Record" book, published by Dome, from your office supply store.