You just started your business. Do you really need to worry about small business accounting now? Yes, you do. It will pave the way to your success! Besides, it’s a lot easier than you think. Take a look at the doable tips listed below.
Open a new bank account
A lot of new entrepreneurs in Concord, NC make the mistake of mixing their finances. They slave hour after hour, tallying business expenses from their personal accounts during tax season when they could have avoided this by opening a new business account.
A new bank account for your business functions as your safety net too. In the event that you face lawsuits or bankruptcy, you won’t have to worry about losing all your assets.
You can start by opening a business credit card and a checking account. Contact your bank ahead of time so you’ll know what documents to bring for your appointment.
Track where your money goes
Every little cent adds up. If you don’t keep an eye on your expenses, you might find out that your business isn’t doing well a little too late.
If you’re not too fond of lugging around a wallet full of receipts, use your business credit card. This lists all your expenses to the dot. You can even earn rewards or cashback depending on how much you spend.
Record your income
What happens if you don’t? You underpay your taxes— which leads to penalties from the IRS. You wouldn’t want that, would you?
That’s why it’s important to document where your revenue is coming from. Profit from sales, loans, and other cash incentives are easy to lose track of if you don’t put everything on file. As a small business owner, you can make use of accounting software to get the job done faster. In fact, even something as simple as a regularly updated Excel spreadsheet works! All in all, accurate record-keeping is key to your small business accounting.
Create a system for your payroll
Begin with deciding on a schedule. When is the best time for you and your employees? There’s nothing wrong with doing your business payroll on your own. But, if it starts taking too much of your time, consider outsourcing the workload. Having an expert on the job prevents errors while ensuring your payroll and taxes are always up to date.
Also, don’t forget to include yourself in the payroll. How much are your services worth? Citing this down is a great way to prevent exhausting your current resources.
Choose your payment method
How do you want your clients to pay for your products and services? Aside from accepting cash, you’ll also need a way to accept credit card payments.
One option would be to apply for a merchant account with your bank. A merchant account is a bank account that allows you to accept credit payments.
Another option is to sign up for a third-party payment processor (like Paypal). Some processors charge per transaction, while others provide a monthly membership plan. You can do a bit of digging on the Internet to see which rates work best for you.
Know your gross margin
Do you want more income? Then get to know your business’s gross margin. It is the difference between your revenue and the direct costs incurred by your business.
Being aware of your gross margin gives you control over how much you sell your products and services. This also makes sure that you aren’t selling yourself short, literally.
The first few months of your business startup will dictate whether it will flop or not in the coming years. That’s why it’s crucial to form a strong foundation now through small business accounting. This helps you track your cash flow, control your finances, and pay your taxes on time. Once you have the ins and outs mastered, keeping your business on top of the industry becomes a piece of cake.
Are you finally ready to take up small business accounting on your own? If not, it’s always okay to ask for help. Our small business accounting firm is here to answer any questions or concerns you may have.