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Do you struggle keeping track of your business expenses? You need accounting for a small business. Here's your step-by-step guide to stay on track.
Congratulations on starting your new business! Now, what comes next?
A lot more goes into running a business than a great product or service. You need a network of services so you can stay focused on what's important to you.
Accounting for a small business may not be the most exciting aspect of being a business owner, but it's important for staying on track and becoming successful.
82% of small businesses fail because they have poor cash flow. In this step-by-step guide, we'll tell you what you need to be a part of the 18%.
Only 50% of entrepreneurs use software to keep track of their small business accounting. This includes tracking business expenses and their day-to-day operations.
How can you thrive if you don't know how much money is coming in and out of the door? You can't. The following steps are a great jumping off point to get yo
Open a Business Bank Account
If you've already done this, kudos! There are a lot of entrepreneurs who don't.
You want to keep your personal money separate from your professional money at all times. This may not seem important at first but it will be when tax season rolls around.
Choose a bank that offers you the most with your account. It may be your personal bank or you find another financial institution that meets your needs. Don't be afraid to carve out an entire day visiting banks in your area.
Find the Right Accounting Software
You don't need an entire accounting department at first, but you do need some help from a bookkeeper and the right software to stay afloat.
There is a big difference between accounting and bookkeeping. Bookkeeping is the day-to-day tracking of your cash flow and expenses. It involves imputing receipts and processing payments as well as reconciling your bank account.
Accounting is the analysis of the bookkeeping. It's taking the data from the bookkeeping system and developing financial statements. A CPA that handles small business accounts will help you come tax season, too.
When you're starting up your business, you may be your own bookkeeper so find an accounting program that is easy to use and understand. There are dozens to choose from so make a list of what you need it to do and go down the list, checking it off as you review different software.
Keep Track of Everything
How to keep track of business expenses is easy: Save everything! Receipts, statements, credit card statements, canceled checks, invoices, financial statements, or any other document that involves money coming in and out.
The IRS allows small businesses to exempt certain expenses when starting up and you'll need all these things to maximize this benefit.
Scan anything you can into your software system and input the rest. You'll be able to stay on top of your business's finances and make life a lot easier come April 15th.
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