Accounting and bookkeeping can seem like a daunting task to many new business owners. However in reality there are a few basic pieces to nail down that will go a long way in keeping things organized and efficient.
Remember accounting is a lot more than just being ready for tax season at the end of the year. Even more importantly for your business you need to know where your money is going and coming from. Managing your money lets you see what parts of your business are doing best, which clients are more profitable, what excessive expenses you might have etc..
Separate: Keep business and personal expenses separate. This rings especially true if you’re operating as a sole proprietor. Set up a separate checking account for your business.
Stay up-to-date: Don’t fall behind on your basic bookkeeping activities. Make dedicated times to record everything. We suggest once a week doing a wrap up and putting in all expenses and making sure everything was recorded.
Automate it with software: Use a program to help automate the process. When you do this setup basic categories for your expenses like office supplies, travel, food, wages, product development and any other major expenses your business will have. It is important to keep it simple but also have a general understanding of where your money is going.
Consult an advisor: One of the most important things you can do is spend time with a consultant who has done this before. Now, this can get expensive but even one session can get your system setup and organized. Also think outside the box about who you can talk to about this. Think about parents friends who might run their business or maybe the accounting department at your college can help.
If you’re looking to improve your accounting methods give Wave Accounting a try today.
You can also check out:
Category: Startup Advice