Gross or Net Sales?

One of the largest issues we see with business owners doing their own books is how they record sales.

A majority of the time unless you issue an invoice for the exact amount you probably have some sort of payment processor platform (Square, Stripe, Shopify, Paypal, etc). On the surface this isn't a problem. However, if you are only recording the amount that hits your bank account and non of the fees/refunds/discounts/etc you'll be understating your gross sales.

Most of the payment processors charge anywhere from 3-4% which is withheld before that money hits your account. In reality you could be understating your sales by that amount.

Something to keep in mind with the IRS staffing up for potentially more audits of small and medium sized businesses in the coming years.