People who decide to start their own business are perfect examples of perseverance and making a living from being passionate about business, but have no doubts – it has cost them a lot to be where they are now.
Business owners often deal with large amounts of tasks that can be overwhelming unless action plans are designed. Accounting tasks are tougher than other business areas so they need more attention. This guide will show you how to have your accounting bases covered and how to stay ahead of any possible mishaps and focus on making your business even more successful.
Opening a Business Bank Account is the first thing you do after your business has been legally registered because you need a place to put your business income. It is recommended to open a bank account solely for your business because it takes the complexity out of tax procedures plus you’ll always want to keep distinct records between your personal finances and your business.
Having a separate bank account for your business is not mandatory unless we’re talking about a business partnership or corporation, but it will definitely provide more control to handle financial business matters.
You can start with a business checking account and other savings accounts for different funds you need or for planning tax purposes. Explore different banks and lenders and see how their fee structures vary from bank to bank. Keep in mind that usually, business current accounts have higher fees than a personal account, so consider which one will better protect your interests now that you’re just starting a business.
Tracking your expenses with the utmost strictness is the best way to have a solid business foundation. This is the best tool to accurately know how well your business is growing, also allows you to clearly create financial statements, deductibles, tax returns and a long list of other accounting endeavours.
First, find a way that allows you to organise receipts and other accounting records that you can turn into a habit that if you start now, will prove to be useful for years to come. Here’s a list of receipts that require a little attention:
- Business travel expenses
- Vehicle-related expenses
- Receipts for home office and gifts
Bookkeeping deals with anything related to the day-to-day process of registering transactions and bank statements and it differs from Accounting, which is the process that uses bookkeeping information to measure the company’s growth through financial statements.
New business owners have several ways to approach bookkeeping duties. They can opt to do it themselves with a computer program like QuickBooks or an Excel spreadsheet. Sometimes business owners hire a third party that handles partial or full accounting duties for them and larger brands have their accounting staff.
Chances are that if you are just starting your business it’s still a one-man company, but keep in mind that if you have hired someone to help you out as an assistant or an IT person, they can be labelled either as employees or as an independent contractor. If they’re your employees you must handle their payroll process as well as yours.
This means that you must set a payroll schedule that addresses taxes correctly, keep in mind that taxes work with strict deadlines and failing to comply can result in fines, no matter how small your business is now.
Reevaluate methods periodically
The way you handle your business while it was starting may differ greatly from the way it should be conducted after it starts growing so your early methods may not be useful after you’ve reached a certain point of success.
If you keep these aspects of your business present at all times you can ensure a good path to success. Having control over your numbers will help the process of growing even more.
Now, if you’re just planning on starting your new business it is a good idea to get a hold of as much financial support available as you can. A good idea to boost earnings in order to follow your dreams of becoming a businessperson is reclaiming money owed from mis-sold PPI.
Once commenced, accounting within the small business will become complex and hopefully, you’ll have to rely on a third party for support due to the expansion of the business.