When you are first starting a business, accounting can be a difficult task to master. However, there are several things you can do that can make your job much easier as you open your doors to the public.
Keep Your Finances Separate
Make sure to keep your personal and business finances separate. Do not place your personal assets and your business assets in the same bank account. If you are a sole proprietor, you are not legally required to keep a separate bank account, but doing so is highly recommended. Have a checking account for making payments and a savings account that will not only allow you to earn interest, but will also make it easier to handle taxes.
Get a Business Credit Card
Open a business credit card so that you can start building business credit. Also, it will be easier to avoid co-mingling business and personal assets. Because you will be able to better track your expenses, you will have an easier time with accounting. To obtain a business credit card and to open a separate business bank account, you will need a business name and you will usually need to be registered in your state or province.
Keep All of Your Receipts
Remember to track all of your expenses. Keep all of your receipts. Receipts you must not forget to track include restaurant bills, receipts for gifts and home office receipts. If you must use a vehicle for travel for business purposes, make sure to track this as a business-related expense.
If you must engage in any out-of-town business travel, make sure to keep all related receipts. By keeping all of these receipts, you'll have an easier time writing off business-related expenses off your taxes and you will also be able to make sure that you receive each unique tax write-off. This is especially important if you are operating from a home office.
Work on Finances Everyday
Set aside time each day to organize your finances. Spend 15 minutes and do not allow anything else to get in the way of this. By doing this, you will have more insight into your business and will also be able to
When you first begin, you can afford to perform your own auditing. However, as your business grows, you may find it impractical to perform your auditing yourself and you will be better off finding an audit firm that will perform your auditing for you.