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When it comes to taxation, a limited liability company (LLC) is the most flexible type of business entity. It lets you elect to be taxed in several ways, including the tax treatment that’s usually only for S corporations.

If you’re interested in the potential tax savings of making that election, here’s everything you should know before deciding, including the pros and cons involved, the eligibility requirements, and the specific impact on your taxes.

Benefits of an LLC Being Taxed as an S Corp

There’s only one legitimate benefit to treating your LLC as an S corp for tax purposes, but it’s significant. Making the election lets you reduce the portion of your business’s earnings that are subject to self-employment taxes.

In fact, besides earning less money, changing the tax classification of your business is the only way to pay less in self-employment taxes. Many of the deductions that reduce your income tax burden, like traditional retirement contributions, won’t help you here.

By default, filing as an LLC means that 92.35% of the net earnings from your business activities are subject to self-employment taxes, also known as FICA taxes. Your net earnings equal your gross revenues minus your tax-deductible business expenses.

The standard self-employment tax rate is 15.3%, of which 12.4% goes to fund the Social Security program, and 2.9% goes toward funding Medicare. As you can imagine, reducing your earnings subject to a 15.3% tax can generate some significant savings.

For example, say your LLC generated $100,000 in net earnings in 2021. Using the default LLC tax treatment, you’d owe $14,130 in self-employment taxes. (92.35% x $100,000 x 15.3%)

However, choosing to be taxed as an S corp might allow you to pay self-employment taxes on just 75% of those earnings, in which case you’d only owe $10,597 in taxes and save $3,532.

How Do LLCs Get Taxed?

When you file as an LLC, the default tax method doesn’t require you to pay any taxes at the entity level. Instead, all your company’s net earnings flow through to your personal return, where you’ll incur some income and self-employment taxes on the amount.

There are some slight variations depending on the number of owners your LLC has. Here’s how it works in each scenario.

Single-Member LLC Taxes

A single-member LLC has only one owner. By default, these are disregarded entities for tax purposes. As the owner, you pay taxes on the business’s net earnings the same way you would if you were a sole proprietor.

That means you generally don’t have to file a separate tax return for your company. Instead, you report your revenues, expenses, and net earnings on your Internal Revenue Service (IRS) Form 1040, Schedule C.

Like a sole proprietorship, you have to pay the 15.3% FICA tax on 92.35% of your net earnings from self-employment. You’ll also owe federal and state income taxes on your net earnings after a few additional deductions.

Multi-Member LLC Taxes

Multi-member LLCs have at least two owners. They’re also disregarded entities for federal income tax purposes, but the owners pay taxes on the business profits as if it were a partnership rather than a sole proprietorship.

That means the owners have to file an IRS Form 1065 for the business to report its partnership income, even though the LLC pays no taxes at the entity level.

In addition, the partnership must issue a Schedule K-1 for each LLC member, which reports that individual’s portion of the company’s profits or losses. Each owner’s percentage is fixed and should be in the LLC’s operating agreement.

Then, at the personal level, each owner has to pay self-employment taxes on 92.35% of the net earnings on their K-1. Finally, they’ll owe federal and state income taxes on their K-1 net earnings minus allowable deductions.

Pass-Through Entities

If you’ve read through guidance about legal entity structures, you’ve probably come across the phrase “pass-through entity.” In simple terms, that refers to companies that pay no taxes at the entity level. Instead, all income passes through to the owners.

Single-member and multi-member LLCs are both considered pass-through entities by the IRS, as are sole proprietorships, partnerships, and S corporations.

Pass-through entities contrast with C corporations, which must pay taxes at the entity and owner levels, leading to the infamous double-taxation problem. C corps have a flat tax of 21% on all net earnings in 2022.

For example, say you’re the sole shareholder of a C corporation that generates $100,000 in net earnings. You would have to file a separate return for your C corp using IRS Form 1120 and pay $21,000 in corporate taxes.

Subsequently, you could keep the remaining $79,000 in the C corp or distribute some or all of it. Your distributions typically count as dividends subject to long-term capital gain taxes but not self-employment taxes.

How Does an S Corp Get Taxed?

Like LLCs, S corporations are pass-through entities. That means they don’t owe any taxes at the corporate level. Instead, earnings from the business flow through to the shareholders according to the percentages in the operating agreement.

Each shareholder must then pay federal and state income taxes on the amount distributed to them after accounting for individual reductions, like contributions to traditional retirement accounts and the standard or itemized deductions.

However, they don’t have to pay self-employment taxes on the S corporation’s net earnings. Instead, S corps must treat their owners as employees and pay them a reasonable salary. Only those wages are subject to the FICA payroll tax.

In addition, the S corporation and the business owner split the 15.3% tax, with each picking up 7.65% on their returns. As a result, you avoid paying FICA taxes on the rest of the S corp’s net earnings distributed to you.

Naturally, this incentivizes you to pay yourself as low a salary as possible to minimize your self-employment taxes. However, that’ll get you in big trouble with the IRS. Your salary must be “reasonable,” and the IRS won’t hesitate to call you on this.

There’s some inherent subjectivity to this requirement, but an easy rule of thumb is to pay yourself a wage equivalent to the market rate for the services you provide your company.

For example, say you’re a freelance bookkeeper, and your S corp generates $90,000 in net earnings. In your city, a bookkeeper with your experience level typically earns $65,000, so you pay yourself an equivalent salary and take the rest as distributions.

For more guidance on what constitutes reasonable compensation for an S corp shareholder-employee, check out the IRS resource and consult with a Certified Public Accountant (CPA).

Using software to track your company’s cash flow makes calculating your taxes much easier. Fortunately, Lendio offers free accounting software for small businesses. Give it a try today!

How an LLC Being Taxed as an S Corp Works

If you elect to have your LLC taxed as an S corp, you’ll follow the same taxation rules outlined in the section above. You must pay yourself a reasonable salary subject to FICA and income taxes, then pay income taxes on distributions of the remaining profits.

To be taxed as an S corp, you must complete and file IRS Form 2553. To qualify for the tax treatment during a tax year, you generally must do so no later than two months and 15 days after the start of the year.

For example, if you’re using the standard calendar year, you must complete and file Form 2553 by March 15th. Alternatively, if you started your business partway through the year on June 1st, you’d have until August 15th.

If you make the election on time, your LLC will receive S corporation tax status for the entire tax year and all future tax years unless you file additional paperwork to revoke the election.

Note that if you elect to have your LLC taxed as an S corp, your legal business structure is still technically an LLC. Remember that when considering issues like personal liability protection and specific state requirements.

Requirements for an LLC To Be Taxed as an S Corp

For an LLC to be taxed as an S Corp, you must meet some fundamental IRS eligibility requirements in addition to filing the forms as discussed in the previous section. These include the following:

• Be a domestic entity
• Have only allowable owners

• May be individuals, certain trusts, and estates 
• May not be partnerships, corporations, or non-resident alien owners

• Have no more than 100 owners
• Have only one class of stock; for LLCs, all owners must receive equal rights for distribution and liquidation
• Not be an ineligible entity (i.e., certain financial institutions, insurance companies, and domestic international sales corporations)

For more detail on these requirements, you can look at the IRS instructions for Form 2553.

Disadvantages of an LLC Being Taxed as an S Corp

There are a few potential disadvantages to electing to have your LLC pay taxes as an S corp. Typically, the most significant ones to consider are the following:

• Retirement contributions: Filing as an S corp rather than an LLC may reduce the amount you can contribute to some of your tax-advantaged retirement accounts.
• Higher tax preparation fees: Because filing as an S corp requires an additional income tax return for your company, you’ll usually pay an accountant more to complete your taxes each year.
• Reasonable salary mistakes: The IRS can decide the salary you paid yourself wasn’t high enough and reclassify some of your distributions to wages after you file your return. That will increase your S corp tax liability and may cause you to owe back taxes, penalties, and interest.

Most disadvantages of having your LLC taxed as an S corp come from increased paperwork and complexity. There are more moving parts to consider, which may cost you additional time or money.

Should You Choose an S Corp Status for Your LLC?

Choosing to elect S corporation status for your LLC often comes down to a simple calculation at lower incomes. If you'll save more money from the tax benefits of the election than you’ll spend on the increased costs to maintain the entity, it’s often worth it.

However, the decision becomes increasingly complicated the higher your earnings are and the more income streams you have.

For example, if you have W-2 wages from a job with another employer, it may reduce your self-employment tax savings from electing S status.

Ultimately, making changes to your small business’s tax treatment is a significant decision and can have repercussions beyond the scope of this article. As a result, you should always consult with your CPA before filing the election.

Using software to generate your financial statements makes tax time much easier for you and your accountant. Fortunately, Lendio offers a free small business accounting app. Give it a try today!

*The information provided in this post does not, and is not intended to, constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.

Invoices and bills are basically the same things, right? Not really. Although they’re both commercial documents, they have distinct differences between them and are used at different times during a business transaction. 

As a business owner, you may have heard the term “bill” when someone refers to an invoice or vice versa. And at some point, you’ve likely had to send both of these items to your customers. 

We’ve already discussed the differences between an invoice and a receipt in our article, Invoice vs Receipt. Today we’ll dive into the differences between invoices and bills.

What Is an Invoice?

Simply put, an invoice is a request for payment. A business will issue this to its customers after providing products or services so they can collect payment for what was supplied. It includes information such as: 

• An itemized list of products and services 
• Total amount due
• Payment terms (Net 15, 30, 60, etc.)
• Invoice date
• Invoice number
• Company contact details
• Customer contact information
• Payment due date

Including these sections lays out clear details on what’s expected of the customer and when so there’s no confusion about what the invoice is for or when the payment is due. And if a problem arises, the customer can get in contact with the business for questions.

Invoices are common use for businesses such as contractors, freelancers, and vendors. A sales invoice also comes in different forms. You might see a paper invoice, email, or PDF. The most effective way to send a professional invoice is by using accounting software. 

With Lendio’s free mobile app, you can send invoices digitally so you always have a record of what you’ve sent. Sending invoices and keeping good records of them is important for three reasons:

1. It helps the business keep track of inventory. Inventory accountants match up purchase orders with invoices to verify inventory and income in the accounting process. 
2. It’s a legal document. Invoices prove that your business provided products or services. If you aren’t receiving payment from a client, the invoice and other subsequent documents can be used to enforce payment through the legal system. 
3. Outstanding invoices are apparent. Invoicing multiple customers gets confusing without accurate records. Using invoicing software can alert you to unpaid invoices. It takes the guesswork out of getting paid and improves cash flow. 

What Is a Bill?

A bill is a request for payment too, but it’s a bit different. Think of how you might ask for the bill when visiting a restaurant. You’re obviously not going to tell your waiter that you’ll pay for your food in 30 days. That’ll get you some strange looks and a visit from the manager. 

Instead, you pay for the meal right then and there. Billing covers a one-time transaction and requires immediate payment. It acts as proof that goods and services were provided the same way invoices do. Instead of accepting payment on a future date, it’s expected right away. 

Billing is a common practice with several types of establishments. Places like retail stores, restaurants, nail and hair salons, or hotels. When you see the bill, it’ll have a few key categories that are common for this type of document. 

• Total amount plus sales tax
• Date of purchase
• A list of what was purchased
• Number of items purchased

Before handing over a payment method, the buyer reviews the charges listed on the bill for accuracy. If any errors appear, there’s a chance to discuss that with the vendor and have them corrected before making a payment. 

Once the payment goes through, the service provider issues a receipt to the buyer proving that they completed their purchase. If the buyer decides to contact customer service to return the merchandise, a credit memo is created to process the return and account for inventory. 

The Differences Between an Invoice and a Bill

Invoices and bills might still seem pretty similar at this point. They’re both issued after a service or product is provided. They both include similar information. And they’re both proof that goods and services were rendered, but not yet paid for. A receipt confirms payment for both. 

They have a lot of similarities, but there are several differences too. To truly understand whether a document is an invoice or a bill, you have to ask yourself a few questions. 

One Time or Every Time?

One of the main differences between an invoice and a bill is the circumstances they’re issued under. Invoicing happens when there’s a recurring need for goods being supplied by the business. They’re made for long-term interactions. 

For this reason, many businesses have recurring invoices. They’re sent on a billing cycle where the customer might have the option to set up recurring payments. 

This makes the invoicing process easier for everyone. The frequency of invoices is agreed on ahead of time by both parties. 

While invoices can be issued for one-time transactions, it’s not typical. Bills, on the other hand, are issued for one-and-done transactions. Each time you visit a dentist's office, hotel, or restaurant, you get a bill at the end of your visit. 

These are short-term transactions that usually aren’t recurring. Since payment is due immediately, your transaction ends once you have a receipt in hand.

When Is Payment Due?

Businesses that send invoices have set an agreed-upon date that payments are due with each customer. Invoice payment terms consist of net 30, 60, or 90 days, so a business is essentially extending credit to the person or company making a transaction with them.

Bills don’t have the option to pay later. Instead, you have to submit payment in the form of cash, credit card, or debit when the bill is given to you. When the payment goes through, a receipt is printed and handed to you as confirmation of the purchase. 

It’s helpful to have invoices in a situation when you’re running a business that makes large supply orders every month based on projected sales. The funds for the supply order might be based on the income from the sales you’ve made. 

So a net 30 arrangement with a vendor would help you continue to meet customer demand while regularly getting the supplies you need to stay in business. 

Some projects may require a 50% deposit for services rendered before starting work. In these cases, term invoices also account for advance payments made by the customer. 

What Kind Of Information Is Included?

A crucial point in the invoice vs bill comparison is the level of information included in the document. Since invoices are used for purposes like taxes, legal proceedings, and financing, they have to contain very specific information to meet legal document standards. 

Standards like a unique invoice number, the word “invoice”, and/or contact details for the business and the buyer. This is all in addition to the information we mentioned earlier.

The same information isn’t required to be on a bill. Traditionally, bills contain limited information about the transaction. There’s no need to include customer details, payment terms, or a due date since it’s being paid now. 

Who’s Sending It? 

The biggest difference between an invoice and a bill is who’s sending it.  If you’re on the receiving end of an invoice, then it would be a bill to you because it’s a request for payment that you have to fulfill. However, if you’re the one sending it to a customer, it would be an invoice. 

This is one of the few situations where the two terms could be used interchangeably. As a customer, you get a bill and you’re expecting a receipt after paying. If you’re the business issuing the request for payment, then you’re the one sending the receipt after getting paid.

Overall, invoice and bill are two distinctly different terms. Invoices are used by businesses and bills are usually received by customers. While they might be used interchangeably, it’s important to know the difference and when to use both.

Limited liability companies (LLCs) are the most flexible business structure for tax purposes. While that versatility can be advantageous, it can also complicate figuring out the right way to take money out of your business.

If you’re the sole business owner of a limited liability company, here’s what you should know on how to pay yourself with a single-member LLC. We’ll cover each option, when they’re appropriate, and the tax implications of the most common approach.

Can a Single-Member LLC Pay Themselves?

You can pay yourself from a single-member LLC in multiple ways, but there’s a required method for each situation. It primarily depends on how you elect to treat your small business for tax purposes. You have three options:

• Default: If you file no additional paperwork, your single-member LLC is taxable as a sole proprietorship. That means you must pay yourself exclusively through the owner's draws.
• S Corporation: If you file Form 2553 with the Internal Revenue Service (IRS), they’ll treat your LLC as an S corp for tax purposes. You must pay yourself a reasonable salary, but you can also take any remaining profits as distributions. 
• C Corporation: If you file Form 8832 with the IRS, they’ll treat your LLC as a C corp for tax purposes. You must pay yourself a salary that equals reasonable compensation if you’re involved in the day-to-day operations. However, you can also pay yourself whatever business profit is left over by issuing dividends.

Whichever taxation method you choose, you’ll always be able to pay yourself from your single-member LLC. However, the methods you use to transfer the funds differ, as will their tax consequences at the personal and business levels.

This article focuses on paying yourself from a single-member LLC the default way. Once again, in that case, you’re a sole proprietor for tax purposes and must pay yourself with LLC owner’s draws. You can’t take a salary, distribution, or dividend.

How Do I Pay Myself From My LLC?

Assuming your single-member LLC receives the default tax treatment from the IRS, you’ll need to pay yourself with the owner’s draws. That sounds formal, but there’s no official way to do this. It just means taking money out of your business to pay yourself.

In practice, business owners can complete an owner’s draw in any of the following ways:

• Writing yourself a check from your business account
• Withdrawing the funds in cash from your business bank account
• Electronically transferring funds from your business to your personal account

Ultimately, it doesn’t matter which method you use to transfer your LLC profits to yourself. It’s simply a matter of convenience. The tax consequences are identical, and the transactions show up in your accounting records the same way too.

To document an owner’s draw, you will need to decrease your business’s cash balance and retained earnings accounts by crediting the former and debiting the latter.

Unlike a salary, owner’s draws don’t have to follow a schedule or stick to a fixed amount unless you set them up as a guaranteed payment in your operating agreement. As a result, you can adjust them to match your business's cash flow throughout the year.

Using software to track your business transactions makes maintaining your financial statements much easier. Fortunately, Lendio offers free accounting software for small business. Give it a try today!

How Are Owner’s Draws Taxed?

Taking an owner’s draw from an LLC is generally a non-taxable event. However, that doesn’t mean you don’t pay taxes on the amount. Instead, you incur your tax liability on those funds prior to the owner's draw, so the transfer is mostly irrelevant.

Single-member LLCs taxable as sole proprietorships are pass-through entities in the eyes of the IRS. That means the IRS disregards them for tax purposes, and you won't pay any corporate tax for the company.

As a result, your business income is taxable at the personal level whether or not you withdraw it. The tax liability for whatever money you generate automatically flows through to your personal tax return.

Because you're not taking a salary, you can't pay your taxes through withholding from your payroll. Instead, you'll need to make estimated tax payments each quarter throughout the year.

Here’s an example to demonstrate how it works. Say you’re the sole LLC member of an LLC taxable as a sole proprietorship. In 2021, you earn $100,000 in net income through your business.

At this point, you already know you’ve generated $100,000 in taxable earnings and would owe income tax and self-employment tax on the entire amount.

You then decide to take $75,000 in owner’s draws and leave $25,000 in the business bank account to cover upcoming company expenses. However, that doesn’t impact your tax liability for the year. You still pay taxes on the $100,000 of earnings.

Do I Need To Pay Payroll Taxes?

If you own a profitable single-member LLC, you’re going to owe payroll taxes. However, the portion of your income subject to them varies depending on your business entity's tax treatment.

Remember, "payroll tax" is a term that includes multiple subsidiary taxes. Generally, the most significant payroll taxes are the Federal Insurance Contributions Act (FICA) taxes: 12.4% tax for Social Security and 2.9% tax for Medicare.

If your single-member LLC is taxable as a sole proprietorship, you’ll need to pay FICA tax on your business’s net earnings each year. Whether you pay yourself via owner's draws or keep the money in your company, your FICA tax liability will be the same.

However, it’s more common to refer to these taxes as self-employment taxes in this situation since you’re not actually running payroll. That said, these are the same taxes that businesses running payroll incur on any wages paid.

For example, if you file an election to treat your single-member LLC as a corporation, you’ll generally need to pay FICA taxes on your reasonable salary.

Consider Consulting a Tax Expert

The average independent contractor has a more complicated personal tax return than the typical employee. As a result, it’s often worth engaging a Certified Public Accountant (CPA) as a small business owner, even if you’re operating as a sole proprietor.

If you’ve formed a single-member LLC and want to optimize the way you pay yourself for tax purposes, your business is almost certainly complex enough to warrant hiring a CPA.

The price of their services is a tax-deductible business expense, and they’ll likely save you enough in taxes to justify the cost. Consider getting expert tax advice today!

Accounting software makes tax time much easier for you and your CPA. Fortunately, Lendio offers a free small business accounting app. Give it a try today!

*The information provided in this post does not, and is not intended to, constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.

Debt collection is arguably one of the least fun parts of running a small business. While most people would rather avoid it at all costs, it will actually cost you to avoid it. There are a few things you can do to make this process easier for yourself and your customers. 

In this article, we’ll go over eight successful debt collection techniques you can employ to make the most out of your aging accounts receivable. 

Tip 1: Maintain Consistent Contact

It’s about the methods you use as well. Knowing what form of communication your customers respond to the best and what time they’re able to take your call is an important part of the debt collection process. 

One of the best debt collection strategies is the omnichannel approach. This approach essentially uses all known methods to contact your customer at the right times. This includes:

• Email
• Phone calls
• USPS mail
• Mobile app
• Automated texts

An example of this is sending a reminder email with a link to an online payment portal. The chance to resolve the payment issue through an online portal or a mobile app is extremely helpful in getting unpaid debt off your books. 

Tip 2: Make Payment Terms Clear

If your client then has complaints or is confused about the terms of the agreement, you can quickly address those concerns so there’s no further issue. With unclear terms and no contract, it will be much more difficult to enact debt recovery practices with success. 

As a best practice, you shouldn’t begin any work without a signed contract in place that provides specific details on:

• What you’re being paid for
• How you’ll be paid
• When payment is due
• What’s considered late 
• Any consequences for late payment

Tip 3: Make Paying Easy

When your payment process is inconvenient, it obstructs your ability to get paid on time. That impacts your cash flow. Streamline your bookkeeping and your payment process with accounting software. 

Tip 4: Have Empathy, But Keep it Professional

Showing empathy when customers are going through a rough time helps maintain your relationship with them and allows you both to come to a solution on the overdue payments. This might result in offering them a payment plan to help them get caught up. 

Other times you’re dealing with someone who is actively trying to avoid paying. It’s important not to make any assumptions about the customer’s situation. Try to be customer and solution-oriented. Have empathy towards the customer, but be direct about resolving the issue.

If they get abrasive during your conversation, you still have to keep a level head. Professionalism is part of your reputation. Unlike professional debt collectors, you’re likely not trained to handle verbally abusive or belligerent debt collection calls. 

You can take some tips from them though: 

• Don’t take it personally
• Keep your cool
• Don’t let consumers waste your time – be direct. 
• Suggest a call back later

Tip 5: Keep Good Records

• Friendly payment reminders
• Past due payment notice
• Final Notice
• Direct Customer Contact
• Letter of Demand

If payment is still delayed after that reminder, there should be a past due payment notice sent. Include the amount they still owe and politely request payment at the earliest possible date. 

Still no payment? Time to send a final notice. Your customer is no longer within the terms of payment you both agreed on. This contact attempt will be more firm than the previous ones, it should still include the amount of debt and a request for payment by a specified date. 

If you’re not making headway after the first three collection efforts, then direct customer contact is your next move. A phone call or visiting your client in person may help resolve the issue. At the very least, you may be able to confirm their contact info and address as the same. 

Next up is the letter of demand. This is not to be taken lightly. A letter of demand is sent by certified mail (to confirm that the customer received it) and you’ll keep a copy of the letter for yourself. This one is very direct and firm in its request for immediate payment. 

Tip 6: Centralize Your Debt Collection

Centralizing your debt collection information allows others in your company to view the collection details for each consumer debt. With a collection team backed by a central database system, your debt collectors can:

• Get automated dials
• Notify when an account needs review
• Send alerts when issues arise
• Quickly view and search receivables information
• Increase the number of successful collections

Tip 7: Check Customer Credit

When the nature of your business requires you to extend credit to your customers, you should check their credit references and see if there are any red flags on their credit. It doesn’t have to be a hard inquiry, but you should at least know if they have delinquencies with other businesses. 

This can tip you off before you sign a contract and make your life a lot easier. 

Tip 8: Know When It’s Time to Call In The Professionals

A reputable debt collection agency works on your company’s behalf to resolve delinquent debts. Most collection agencies are paid on a contingency basis. Meaning that they only get a percentage of the debts they collect. 

Before choosing a debt collection agency to work with, it's best to look them up through the Better Business Bureau (BBB) and find out if they’re licensed and bonded within your industry. Once they’re vetted you can start reaping the benefits of working with them:

• They have trained debt collection experts 
• Their collectors can conduct debt collection negotiations
• They maintain good customer service on behalf of your business
• Higher rate of debt collection success
• Unmatched debt collection strategies

Overall, debt collection is a sensitive topic for most consumers who become debtors. As a creditor, it’s your responsibility to collect your debts to keep your business running. 

Remember to keep empathy and solutions at the forefront of your debt collection process for clients who’ve run into hard times. The process of collecting debt isn’t easy, but with the right resources and consistent communication, it becomes more effective. 

*The information provided in this post does not, and is not intended to, constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.

While learning how to invoice as a freelancer, contractor, or another business owner, you may have heard the terms invoice and receipt used interchangeably. However, the two terms are meant for two separate steps within a business transaction. 

Both have distinct purposes behind when to use them. They even have completely different information on them. In this article, we’ll cover what the differences are and why it’s important for your business. 

What Is an Invoice?

An invoice can be used as proof that goods and services have been provided to a customer. The sales invoice is a request to the customer for payment. So an invoice is provided by a business before payment is made. 

This allows the business owner to claim rights to the payment they expect for the goods or services they provided to the buyer. 

A good invoice has several pieces of information that make it easy to maintain good records for you and the clients receiving your invoice. Compared to a receipt, there’s much more information included on an invoice. 

Any professional invoice should include the following fields: 

• The business name and contact information
• Client name, email, phone number, and address
• Invoice date
• Description of services or goods
• Line items
• Invoice number
• Due date
• Item price
• Any included sales tax or discounts
• Payment methods and options
• The total amount of the sale
• Payment terms (Net 30, 60, or 90)

To make the process of including all this information easier, many small business owners choose to work with invoicing software as opposed to a standard MS word invoice template. 

Invoicing software, like Lendio's software, enables small businesses to send professional quality invoices with customizable invoice templates. We even let you add your own logo and colors. 

Things like company logos, brand colors, and special fonts aren’t required, but they do help businesses present a polished appearance. 

As a best practice, business owners should include clear payment terms on their invoices, along with a statement of any applicable late payment fees. This discourages clients from sending delayed payments and disputes for unpaid invoices. 

If that’s not your style, you might choose to include a discount for early payment. 

What Is A Receipt?

Unlike invoices, an official receipt is only presented to the customer after payment, in the same way you only get a receipt from a store after your purchase.

Customers use receipts for multiple purposes: returning a defective item, finding contact information for the business, and proving they paid for something. 

Small business owners find receipts useful for some of the same reasons. It’s also used to track business expenses, acts as proof of invoice payment, and comes in use for tax purposes. 

Business owners also use sales receipts as proof of purchase when they’re applying for loans from banks or other financial institutions. Receipts have plenty of important information on them that fuels why they’re used for a variety of purposes. A typical receipt will have: 

• Items or services purchased
• The price of the items or services
• Any sales tax or discounts included
• Business contact information
• Purchase date
• Which payment method was used
• Receipt number or invoice number

Big difference from the invoice shown earlier, right? It clearly confirms when payment was made and what it’s for. The last four digits of the payment method are also located in the top right corner. 

Credit card payments are most common, but what about receiving cash? A cash payment would be recorded as cash along with the total amount paid and any change returned to the customer from the transaction. These details make it easy to process refunds if needed. 

The logo and brand colors on a receipt help identify what business the purchase was made from. All in all, much less information is required on a receipt compared to an invoice, but that’s not the only difference between them.

The Difference Between The Two

• Invoices have more information than a receipt. Invoicing involves customer billing information, payment terms, and due dates that receipts don’t have. 
• Invoicing happens before payment is received. It acts as a way to collect payment after completing a purchase order. 
• A receipt is proof that payment was made on an invoice. 
• Receipts are useful for tracking expenses, tax purposes, and making returns.
• Invoices are helpful in accounting and requesting payment. 

For example, an invoice doesn’t prove ownership of an item the way a receipt does. Possessing an invoice for an item has no legal backing for proving you own it. A cash receipt showing that you’re the buyer will help prove ownership. 

Even though an invoice doesn’t prove you’re the buyer, it can be helpful in qualifying for some forms of business financing. When you need to improve your cash flow, the invoices sitting in your accounts receivable can help you qualify for invoice factoring. 

Say you also receive a loan based on the outstanding invoices from your customers. Once customers pay off their invoices, you can repay the loan. 

Receipts can’t help you qualify for business loans, but they can help you get your taxes in order. Receipts are often needed to show that a business has paid the correct amount of money in taxes.  

Lendio’s invoicing software connects with an expense tracking system. Their receipt management app helps you keep all your business receipts in one place. In the event of an IRS audit, having those is extremely helpful in avoiding tax penalties.

Can An Invoice Serve As A Receipt?

For example, a client visits customer service for your company, attempting to make a return. If they show up with an invoice, there’s no proof that they paid for the product they’re returning. 

This makes it much more difficult to process the return since your employee is looking up the purchase based on the invoice number or customer name. Some point-of-sale systems can’t even process a refund without a receipt. 

When using invoices or purchase orders as receipts, it’s difficult to confirm if all invoices are paid. This is especially true for small business owners who do their own bookkeeping. Without receipts to match up with invoices, you might be missing out on a payment that’s behind. 

Why Are Receipts Important In A Business?

Not true. Your receipts have the power to protect you during an audit, confirm that you’ve paid for things, and even help you reconcile your books. It doesn’t stop there. They also help you keep your expenses in check which is a big deal when running a business. 

These are all very important functions that shouldn’t be neglected. Although it’s easy to forget about receipts and chalk them up as extra clutter, they’re important for maintaining good business records.

Overall, invoices and receipts serve completely different functions. While they’re referred to in the same context, it’s important to have both in your arsenal. Invoices act as a way to request payment while receipts prove that you’ve paid.

Self-employed individuals miss out on employer-sponsored benefit programs, but they can still access powerful tax-advantaged accounts to help fund their retirements. The Solo 401(k) and SEP IRA are two of the most popular choices.

If you’re a freelancer, independent contractor, or small business owner, here’s everything you need to know about their differences to determine which is best for you.

What is a SEP-IRA?

SEP-IRA is short for Simplified Employee Pension (SEP) Individual Retirement Arrangement (IRA). In addition to being a mouthful, the name is a bit of a misnomer. SEP-IRAs have very little in common with pensions and are not defined-benefit plans.

Like traditional IRAs, they’re defined-contribution plans where contributions are tax-deductible in the year you make them. In addition, the capital gains and dividends generated within the account are tax-deferred until withdrawn.

Unlike traditional IRAs, SEP-IRAs are primarily profit-sharing plans for the self-employed and their employees. Business owners can contribute company earnings for each plan participant, but employees can’t contribute through salary deferrals.

For employees to put funds into their SEP-IRA, they must forego making those contributions to their Traditional or Roth IRAs. The $6,000 contribution limit for IRAs in 2021 and 2022 applies to Traditional, Roth, and SEP-IRAs, collectively.

The maximum contribution for each SEP-IRA participant is the lesser of 25% of their salary and $58,000 in 2021 or $61,000 in 2022.

If you own a sole proprietorship or partnership and have no wages, the limit is 20% of your net earnings minus half the self-employment tax from your IRS Form 1040 instead.

Notably, employers must make proportional contributions for themselves and all eligible employees. In other words, every participant’s contribution must be the same percentage of their compensation.

Though you can use less strict requirements, eligible employees must include those that meet the following criteria:

• Age 21 years or older
• Earned $650 or more during the tax year
• Worked for the business in at least three or the last five tax years

For example, say you own a corporation. You pay yourself a $100,000 salary, and your eligible employee’s salary is $50,000. If you contribute $10,000 to the SEP-IRA for yourself, you must contribute $5,000 for your employee so that both of you receive 10%.

What is a Solo 401(k)?

A Solo or Individual 401(k) plan is the same type of account as an employer-sponsored 401(k) plan, only for business owners with no employees. Otherwise, they provide much of the same benefits and follow many of the same rules.

For example, a Solo 401(k) allows tax-deductible contributions and tax-deferred asset growth within the account. Alternatively, you can choose to make Roth contributions. They're taxable when you make them but tax-free upon withdrawal.

Another trait they have in common is that employers and employees can contribute. However, as a self-employed individual, you play both roles. That gives you a significant degree of control over the amount you put into the account.

Your maximum employee contribution is the same as an employer-sponsored 401(k)’s. You can defer 100% of your compensation up to $19,500 in 2021 and $20,500 in 2022, plus a $6,500 catch-up contribution if you’re over 50 years old.

Through your employer role, you can also make profit-sharing contributions. Like a SEP-IRA, the limit is 25% of your salary or 20% of your net business earnings minus half your self-employment taxes.

The total amount you can contribute to the account is $58,000 in 2021 and 61,000 in 2022. That limit applies to your employee and employer contributions combined.

Solo 401(k)s usually let you save more each year than other self-employed retirement plans. Typically, the only reason not to have one is that they’re only available to businesses with no full-time employees other than the owner and their spouse.

Differences between the two.

Solo 401(k)s and SEP IRAs are both defined-contribution retirement accounts with similar tax advantages for the self-employed. However, there are significant enough differences between them that one will usually be a clearly superior choice for you.

Here are the primary things to consider when choosing between the two retirement plans.

Account eligibility

You can only use a Solo 401(k) plan if your business has no employees other than you or your spouse. If you hire someone else to help with your operation full-time, you won’t be able to open or contribute to one.

Conversely, you can still open and contribute to a SEP-IRA with full-time employees. But remember, if they meet the eligibility requirements discussed in the previous section, you have to make proportional contributions for them too.

Contribution limits

When you’re choosing a retirement plan, one of the most significant considerations is the amount each one lets you save each year. The Solo 401(k) and SEP-IRA contribution rules lead to drastically different retirement savings amounts.

The primary differences between their contribution restrictions are the following:

• Employee contributions: Solo 401(k) plans allow employees to defer 100% of their salary, up to $19,500 in 2021 and $20,500 in 2022, while SEP-IRAs generally don’t allow employee contributions.
• Catch-up contributions: Solo 401(k) plans allow up to $6,500 in annual catch-up contributions for people 50 years or older, but SEP-IRAs don’t.

As you can see, the contribution rules for Solo 401(k)s are generally more favorable than those of SEP-IRAs. In most cases, you’ll be able to save much more money each year with a Solo 401(k) than you would with a SEP-IRA.

For example, say you’re a 55-year-old sole proprietor with $100,000 in net earnings during 2021. Because you have no salary, you could contribute 20% of your net earnings after self-employment taxes to a SEP-IRA.

The self-employment tax is 15.3% and applies to 92.35% of your self-employment income, so you’d owe $14,130 that year. Half of that amount is $7,065. $100,000 minus $7,065 is $92,935, and 20% of that is $18,587.

Conveniently, that same calculation gives you your maximum employer contribution through a Solo 401(k). As a result, if you only made employer contributions, you’d save $18,587 with both retirement accounts.

However, a Solo 401(k) also lets you make up to $19,500 of employee contributions. Since you’re over age 50, you can also make $6,500 of catch-up contributions. That means you’d be able to contribute a whopping $44,587 with the Solo 401(k).

Tax deduction timing.

Both Solo 401(k)s and SEP-IRAs let you make traditional contributions that reduce your tax liability in the year you make them. Growth within the accounts is also tax-deferred until you make withdrawals.

However, Solo 401(k)s also let you make Roth contributions. These won’t lower your tax liability the year you make them, but you won’t have to pay any taxes on the back end when you take your money out of the account.

Loan availability

Generally, you’ll pay a 10% penalty if you take money out of your retirement accounts before age 59 ½. That restriction applies to both SEP-IRAs and Solo 401(k)s.

However, Solo 401(k)s let you borrow against your funds and avoid that penalty. There are complex considerations involved, and you have to pay the amount back within five years, but it can be an asset in emergencies.

That said, borrowing against your retirement is highly inadvisable in most situations. As a result, this difference shouldn’t be much of a deciding factor.

Deadlines

One advantage of a SEP-IRA over a Solo 401(k) is that you have until you file your taxes to open a SEP-IRA for a given tax year. Conversely, you have to open your Solo 401(k) before the end of the tax year or you’ll lose your ability to contribute for that year.

If both accounts are open by the end of the year, you have until you file your taxes to make a profit-sharing contribution to both. However, you only have until December 31st of the tax year to make employee contributions to your Solo 401(k).

Administrative requirements

In general, Solo 401(k)s have more demanding administrative requirements than SEP-IRAs. If you have more than $250,000 in your Solo 401(k), you must file an annual report with the IRS, but there’s no need to do so with a SEP-IRA. 

Which one should I choose?

Generally, the Solo 401(k) is the superior retirement account for a business owner with no employees. It has several significant advantages over SEP-IRAs, including the following:

• Higher annual contribution limits
• Employee and employer contribution options
• Access to traditional 401(k) and Roth 401(k) contribution types

However, if you already have or plan to hire full-time employees other than you and your spouse, you won’t be able to open or contribute to a Solo 401(k). In these cases, a SEP-IRA would be the only one of the two retirement account options available to you.

That said, picking a retirement account for your business is a significant and complicated decision. Before you choose one, it’s always a good idea to consult a Certified Public Accountant (CPA) or another expert to get personalized tax advice.

Lendio offers free accounting software for small business that can make your financial planning much easier. Give it a try today!

Can you contribute to both a SEP-IRA and Solo 401(k)?

Yes, you can contribute to both a SEP-IRA and Solo 401(k) during the same tax year. However, there’s usually no reason to do so. Your maximum contribution amount is generally the same whether you use a Solo 401(k) by itself or together.

However, there are some situations where you may want to contribute to both. For example, if you already contributed to a SEP-IRA during the tax year, you may wish to open a Solo 401(k) to take advantage of the employee salary deferral.

Is a Solo 401(k) worth it?

Yes, a Solo 401(k) is worth it for the average self-employed person. It typically gives you the ability to save far more for retirement than you would with other account types. If you’re over the age of 50, you could save a whopping $67,500 in 2022.

In addition, Solo 401(k)s have more flexible annual contributions than other self-employed retirement accounts. They also let you make Roth 401(k) contributions that aren't tax-deductible when you make them but are tax-free upon withdrawal.

Is a Solo 401(k) tax-deductible?

Generally, all retirement contributions to your Solo 401(k) are tax-deductible, whether you make them via your employer or employee persona.

In addition, the dividends and capital gains your assets generate while they remain in the account are tax-deferred. That means you won’t pay any taxes on them until you withdraw your funds from the account.

The only reason contributions to a Solo 401(k) wouldn’t be tax-deductible is if you create a Roth Solo 401(k). Roth contributions are taxable the year you make them, but the funds are completely tax-free when you withdraw them.

Can I contribute 100% of my salary to my Solo 401(k)?

With a Solo 401(k), you can make employee contributions up to 100% of your salary. However, there’s a hard limit of $19,500 in 2021 or $20,500 in 2022, plus a $6,500 catch-up contribution if you’re over the age of 50.

You can also make an employer contribution of up to 25% of your salary. However, it can’t exceed $58,000 in 2021 or $61,000 in 2022 when you combine it with your employee contributions, not including any catch-up amounts.

In other words, if your salary is within those limitations, you can contribute 100% of it to your Solo 401(k). However, if you earn more than that, you won’t be able to defer your entire salary.

*The information provided in this post does not, and is not intended to, constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.

When you go into business you’re bound to have some customers or even other businesses fail to pay their invoices on time. It might be a matter of forgetfulness or financial hardship preventing them from paying. 

Either way, it can severely impact your daily operations, cash flow, and take up valuable time chasing down late payments. In this article, we will explore the different methods of debt collection for small businesses and a few alternatives to hiring a collections agency.

How Do Small Businesses Collect Debt?

Small businesses collect debt in many ways. It can range from a friendly reminder to hiring legal representation, plus a few things in between. 

Overall, the way debt is collected is based on how long the overdue debt has been there and what type of customer you’re dealing with. Small business debt collection practices include: 

• Reminder emails/ letters
• Phone calls
• Demand letters
• Negotiating bad debts
• Hiring a debt collection agency
• Filing with small claims court
• Filing a lawsuit

Does this client usually pay late or do they try to avoid paying altogether? Perhaps a firm reminder or demand letter will work best. If that doesn’t do the trick, you may have to send their debt to a debt collection agency. 

For a customer who’s typically on time, you’ll need a lighter touch. They may have run into financial issues that affected their ability to keep up with payments. A friendly reminder or phone call is the best option here. 

When Should One Hire a Debt Collection Agency?

As a general practice, most business owners send business debt to collection agencies once it reaches 90 to 120 days past due. 

However, the time frame isn’t the only factor to pay attention to. When you’re looking to collect on a business debt, you should look out for any one of these situations: 

• A customer making unfounded claims about the product or services they received from your business. 
• A debtor completely denies that they owe any outstanding debt without proof of payment. 
• A customer who agreed to a payment plan for their overdue accounts but hasn’t made any of their new payments. 
• New clients with no payment history who don’t respond to your initial attempt at debt collection. 
• Small businesses or individuals who have a history of defaulting on debts. 

You’ll want to keep a copy of each demand letter sent. Each one should be professional, firm, and direct about any legal action or reporting to a debt collection agency.

How Collection Agencies Work

On average, debt collection agencies charge 20% to 50% of the debt they recover. But since they only get paid when they successfully collect a debt, it incentivizes them to use legal tactics at their disposal to get your money. Plus, getting something back is better than nothing.

When you hire a debt collection service, they’ll need to get all the information available about each debtor you have an unpaid invoice with. This includes information like: 

• Customer name, any nicknames, and maiden names
• Addresses, phone numbers, and emails
• Purchase details, transaction dates, amounts, and any contracts 
• What you’ve done in your debt collection process so far 

Working with a good debt collection agency can also protect you from getting into any trouble with consumer debt collection laws. 

Reputable collection specialists abide by the Fair Debt Collection Practices Act (FDCPA), which prohibits small business owners, debt collectors, and their employees from using harassment or unfair tactics when collecting on a past due account. 

These laws don’t apply to B2B debt collections. If you’re a small business owner who needs B2B collections, there are specialized commercial debt collection agencies. 

Steps To Take Before Hiring A Debt Collection Agency

Earlier we mentioned sending friendly reminder emails. This works for customers who are genuinely forgetful, unorganized with their payments or have run into financial difficulty. A polite reminder email or letter brings your unpaid invoice to the forefront without burning any bridges. 

If reminders, phone calls, and letters aren’t working, then it’s time to change tactics. You might offer them the chance to repay their debt on a payment plan or negotiate the debt down to something they can handle. 

If they agree to a payment plan, the remaining payments must be made on time. The alternative is to send the account to collections.  

How to Hire a Good Agency

• They work with the types of customers you work with; commercial collections or consumer collections. 
• They’re familiar with your industry and the rules that govern it. 
• They’re a good representation of your company. Although you want to recover your small business debt, you don’t want to ruin your reputation in the process. The debt collector you choose should be professional and courteous with your customers. 
• Make sure they’re licensed, bonded, and insured. 
• Consider the reviews they’ve received through the Better Business Bureau.

How Much Does it Cost to Hire an Agency?

Most other business debt collectors charge a contingency fee of 25% to 50% depending on the age of the accounts and how many there are. You typically won’t find pricing on their website though. Many times they’ll have you speak to an agent to determine the cost. 

As with any other service, you’ll want to focus on the quality behind it, not just the price. Going with the cheapest option could mean sacrificing customer service or return rates.

Alternatives to Hiring a Debt Collection Agency

Collecting the Debt Yourself

Lendio’s free accounting software for small business is a great option for saving time on sending those email reminders. Sign up for free and see how they can help you improve your accounts receivable.

Selling the Debt

You’ll likely be required to sell at a large discount, but something is better than nothing. 

Going to Small Claims Court

With substantial proof that you provided goods or services and didn’t receive payment, the judge might grant a judgment in your favor,  requiring the client to pay you. This can come with plenty of court fees though. 

Hiring an Attorney

All in all, understanding how to collect debts is important for small business owners. It makes a difference in your ability to do business. While there are some actions you can take on your own, sometimes it helps to call in the professionals. 

Hiring a collection agency, selling your debt, or going to court are heavy hitters in getting your outstanding accounts paid.

*The information provided in this post does not, and is not intended to, constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.

You already know that the top factor to consider when deciding on the social media channels that make sense for your small business is audience: who is your primary customer base, and where are they connecting with other brands and businesses on social media?

So what about video? Should you use YouTube or TikTok to reach your audience? While both channels rely mainly on videos to engage users, they otherwise differ wildly across the board—from audience age to video length and beyond.

Why video?

Most of the folks who use social media aren’t experts in creating or editing video content, which can make entry into video-based platforms feel daunting. But video has never been more important: according to Imagen, online videos will account for over 80% of all consumer internet traffic by 2022. And an Optinmonster study found that a whopping 84% of consumers state that they’ve bought a product or service after watching a brand’s video. With such a sizable majority of internet users engaging with video, shouldn’t your small business be next?

Not all video-based social media platforms reach the same audiences, however. While Facebook “still remains the largest social platform among consumers and marketers” alike, as found by Sprout Social, YouTube and TikTok rely on video as their primary medium, making them the perfect places to zero in on building video-based relationships with your audience. 

Wondering which platform is best for your business? We’ve got the details to get you started.

TikTok

If you’ve been wondering where Gen Z was getting their social content, look no further: they’re nearly all on TikTok. This short-form video-based social media app, owned by the Chinese company ByteDance, is booming in popularity, with most of its wild growth attributable to teens and pre-teens: 

• Number of monthly active users: 1 billion
• Largest age group: 10−19 (25%)
• Gender: 61% female, 39% male (no data on other genders)
• Time spent per day: 89 minutes per day

TikTok users are also the most likely, by percentage, to buy a product that they’ve encountered on the platform. Just under 40% of Gen Z social media users reported buying a product they found specifically in TikTok videos in 2021, compared to 23% of purchases via Instagram ads or 19% via Facebook ads. 

If your small business’s products or services primarily target this age group, it’s non-negotiable: time to start a TikTok account. A product going viral on TikTok, like the 300+-million-views-and-counting hot chocolate bombs (#hotchocolatebombs), can shoot a crafty entrepreneur into the revenue stratosphere.

Because TikTok is a video-based platform—specifically, one with the unique ability to “stitch” or connect videos with others from different accounts—it’s a great way to get people to organically showcase how much they love your offerings. My favorite beauty store here in Chicago, the Korean-skincare wonderland Choc, uses TikTok to demonstrate the best ways to use their myriad skincare offerings—some that you can only buy from Choc. The before-and-after tutorial content that their videos offer is hard to beat. 

On TikTok, engagement is all about hashtags. Knowing which recurring hashtags help make videos go viral and connecting those authentically to your small business will expand your reach on the platform tremendously.

YouTube

After Google, there’s literally no search engine more popular in the world than YouTube (which is owned by…Google). While TikTok thrives in the short form, YouTube showcases longer video content: up to 15 minutes for users and beyond 15 minutes for verified users. The platform also boasts a broader age range and more uniform gender breakdown than TikTok, as well as double the overall users:

• Number of monthly active users: 2+ billion
• Largest age group: 15−35 (highest reach)
• Gender: 46% female, 54% male (no data on other genders)
• Time spent per session: ~30 minutes

Unlike TikTok, however, the experts at Sprout Social have found that most YouTube users turn to the site for entertainment, vs. hunting for new favorite products or brands. “Brands still have a lot of work to do on the platform,” they note, “finding a balance between entertainment and advertising.” 

Threading this needle can be challenging, but the rewards are worth it. Unlike TikTok, “[YouTube] supports active content marketing with a clear call to action,” states the social-media gurus at Promo. “You can ask your audiences to subscribe to your channel, watch other videos, leave comments, [and] visit your website or other social media pages.” Boosting your overall content web in this way can make hugely positive impacts on your business’s bottom line.

Video may be king—but which platform is best?

You may now be sold that video-based content is best for your small business—but which of the above platforms is best to host that content? 

A service-oriented business with fast, fascinating services—like a restaurant making a massive sandwich or a salon doing ornate manicures—could utilize short-form TikTok videos to offer a behind-the-scenes glimpse at how the sausage gets made (perhaps literally). 

“Turn the camera around on things you already do,” shares social media expert Rachel Karten This will entice customers not only to try out your offerings, but to replicate the content on their own platforms as well. 

In contrast, a professional office, like an accountant or small healthcare practice, could benefit from YouTube, with its longer run time, to share a deep-dive on a tax form or detail how a complicated procedure is done safely: for example, like my dog’s beloved veterinary practice recently did on comprehensive oral treatments for their pet-patients.

Once you’ve invested time—and, possibly, money—on your video content for TikTok or YouTube, where else can you use it? Don’t forget about also hosting these videos on your homepage or online shop. This will grow your web of engagement further, directing website viewers to your social pages for a like or follow, while showcasing your brand’s authenticity at the same time.

An added perk of embedding the videos you make for social onto your blog posts or business websites: it helps boost your Google search rankings by increasing the on-page time visitors spend on your site.

Disclaimer: The information provided in this post does not, and is not intended to, constitute business, legal, tax, or accounting advice and is provided for general informational purposes only. Readers should contact their attorney, business advisor, or tax advisor to obtain advice on any particular matter.

Read more about using social media in your small business:

https://www.lendio.com/blog/facebook-instagram-small-business-social-media/

https://www.lendio.com/blog/connect-customers-social-media-tactics/

https://www.lendio.com/blog/social-media-small-business-get-started/