Accounting can be a time-consuming aspect of running a business. This involves tracking, recording, and analyzing all of your business’ finances and using that information to create records, reports and perform tax returns. Maintaining a good bookkeeping record can be vital not only to be compliant with laws and regulations but to keep a watch over the health of your business. Startups can have a number of questions when it comes to accounting. Here are relevant tools and tips to keep in mind when managing the accounting side of your small business.
Use a Business Bank Account
Setting up a bank account separate from your personal account is one of the things a small business should look into. Not only does this make tax season easier for you, it also makes it clear where expenses and profits are coming from. Some tips to keep in mind when opening a business bank account:
Find a Method for Expense Tracking
There are different options to choose from when tracking your expenses. The important thing to keep in mind here is that the IRS requires documentation of income, credits, and deductions in order to process tax returns each year.
Types of information to keep include receipts, bank statements, canceled checks, proof of payments, W2 and paychecks, W2s, tax forms, etc. Make sure to keep close track of expenses related to meals and entertainment, out of town business travel, and vehicle related expenses.
Figure out how your business will get paid and how you will pay your employees. You could set up a point of sale (POS) system or choose to use online payment methods like PayPal or Venmo. When setting up a payroll system, make sure you categorize your workers correctly depending on whether they are employees or contractors.
Develop a Bookkeeping System
Bookkeeping can be learned or outsourced. This involves recording the day-to-day transactions of the business and organizing them in a way that can then be used by accountants to analyze the business. Bookkeeping is an ongoing process that needs to be completed each month.
Companies like Kruggel Lawton CPAs can help with this if you want to focus on your business. Their Client Accounting Services take care of bookkeeping and financial forecasting meaning you’ll have a hands off routine business accounting procedures and advisory services for financial needs.