words Alexa Wang
So you’ve decided to start a business and are looking at doing the company’s accounts? While this can be a daunting task, there are some simple tips and tricks which can make it easier for you. We’re going to guide you through managing your accounts and where to start.
1. Open a bank account
Firstly, you will want to open a new bank account. Having a separate account will ensure you keep your business and personal finances separately. If you then use the business account to pay for things, you can easily track spending and outgoings. Keeping records distinct will make it much easier for you when you come to file your taxes. And, as well as that, if you want funding further down the line, you have clear financial records which can help increase your chances of getting approved.
2. Track your expenses
Receipts, receipts, receipts! It’s important to remember to be organised with all of your expenses and get into a routine for filing them. Whether you use a system where you scan your receipts or keep them all stored in your Filofax, the IRS requires you to keep all receipts for sales under $75.
Receipts you need to focus on include:
- Vehicle expenses
- Business travel
- Home office.
3. Set up payroll
If you’re a start-up business you may be a one-man band and not be employing others. However, when you’ve reached a stage where you are hiring staff you will need a system to pay them and for many businesses this is needed right away. You will need to ensure you pay workers on time and have accounted for all the correct taxes. There are many payroll systems out there which can help you get this all set up.
4. How are you being paid?
Once you start getting sales in, it helps to have a streamlined payment system where the money you make can be transferred straight to your account. If you’re selling online, it’s even easier if your website has built-in payment support so you don’t need to use a third-party.
5. How you pay for things
While there was a time when cash was king, those days are numbers. Use cards or secure checks so that you’re able to keep a trail of spending, making it easier for you to monitor your finances and your expenses.
6. Time to talk tax
Let’s talk about tax. It’s not as scary as it sounds, honestly. If you are organized and keep all of your receipts then you won’t have any issues with completing your tax forms. Your tax obligations vary depending on the business – sole proprietorship, LLC and partnerships will have different tax expectations than corporations for example. Take time to understand this area – but don’t be afraid to seek support from an expert. It’s better to spend a little money getting this right than face fines afterwards.
We understand that organizing a business’ accounts can be daunting (and maybe a little stressful at the start). But, with these steps and a positive proactive approach to getting this important work in order, you’ll have the firm foundations you need for your business to succeed.