Do you have your own small business and don’t know where to start when it comes to accounting? As a small business owner, it’s important to stay organized, keep track of everything and be prepared for the unexpected. Our professionals here at Bodine Perry want to help you cover all bases of your business. That’s why we came up with a list to help small business owners get started…
Open a Bank Account
First thing’s first… Open a bank account for your business, keeping it separate from any personal accounts you may have. Once your business is legally registered, you’ll have to start putting your business income in its own separate account. Start with a business checking and a credit card. Consider opening a savings account as well to help you regulate funds and prepare for tax season.
The groundwork for a successful business is good record keeping. It takes time but it’s crucial to track your business expenses adequately. Make sure that you are aware of what comes in and what goes out. Here are just some receipts that you should be holding onto:
- Meals and entertainment- When going on a business meeting at a restaurant or planning a work outing, keep the receipts and write down the reason for the meeting and who attended.
- Travel- People often take advantage of claiming their personal outings as business expenses but the IRS and CRA are very aware of this. Holding onto your receipts or even making copies of them is a great way to back up your claims.
- Car expenses- Document where, when and why you used your car for business. Put that percentage toward vehicle-related expenses.
- Office expenses- Calculate what percentage of your home is used for your business and just like using your car, apply that number to your home-related expenses.
Hire a Professional
Don’t be afraid to ask for help. Hire a professional if you’re unsure about anything. If this is your first business, then you may not know what to do or where to start when it comes to your bookkeeping. There are professionals that are qualified and trained to help you get to where you want to be and get your business to where it should be. Bookkeeping is different from accounting in the way that it is the everyday process of recording transactions, separating them into categories and coordinating bank statements. When it comes to bookkeeping, you can either:
- Use a software such as QuickBooks
- Hire a professional bookkeeper (part-time, local or cloud-based)
- Hire an in-house bookkeeper or accountant
There are many ways for you to get your bookkeeping done effectively and efficiently. Make sure that you pick the option that is best for you and your business.
Set up Payroll
You might be the only one running the operation or you could hire someone to help you. Decide if that person is an employee or independent contractor. When you have employees, a payroll schedule will need to be created and the correct taxes will need to be withheld. When hiring an independent contractor, determine how much you want to pay them. If you are an American business owner, you may have to file 1099s for each independent contractor that you hire so be sure to keep their name and address with your documents.
Expect the Unexpected
Be prepared for any unexpected situations or roadblocks to occur. Anything such as having to terminate an employee, someone leaving, broken equipment (laptops, phones etc.), tax deadlines. Anything is possible and when you own your own business, this couldn’t be more true. Try to avoid a cash crisis by planning ahead the best that you can.
From opening a new bank account to hiring people and tracking expenses, starting your own small business accounting can be overwhelming at first. Don’t be afraid to ask for help. Our accounting and bookkeeping professionals here at Bodine Perry are here to get you on your feet and your business accounting started. Call us at (855) 851-8318 or visit bodineperry.com.