This is part eight of a series of posts, which in this one we explain how miscategorization will need to be cleaned up and why it's important to have the right categories for your expenses.
If loans are not set up as a register and transactions are not set up as payments to this loan, we cannot see the actual balance of the loan in your Quickbooks or view all the transactions specific to that loan (unless we look in vendor section) and the CPA will not see these in the Balance Sheet but rather some expense one labeled in the P&L Report. Bottom line is it should be entered correctly.
Good deductions are credited to good organization of records and a good CPA. A CPA has certain categories that he plugs numbers into that give you the highest deduction you can get for your business. If your records are disorganized or unclear, this will prevent you from getting as many deductions as you could.
I cannot tell you how many times, a new client tells me what they think their budget is only to find out, it's thousands of dollars more. This is because most people guestimate their expenses, don't track them efficiently and don't analyze the numbers. For example: you could have correct categories for tax purposes and your CPA but not managing your money. This is where our firm breaks down sub-categories because we want to see where are you spending your money EXACTLY and what can we cut to meet your financial goals.