Accounting Tips for New Business Owners

1. Separate Personal and Business Finances

  • Open a dedicated business bank account and credit card.

  • Keep personal expenses out of your business accounts to avoid tax and legal issues.

2. Choose the Right Accounting Method

  • Cash Basis: Record income and expenses when cash changes hands.

  • Accrual Basis: Record income when earned and expenses when incurred.

  • A CPA can help you decide which is best for your business.

3. Use Accounting Software

  • Our firm recommends QuickBooks to manage your books efficiently.

  • Regularly reconcile your invoicing, expenses, and financial reporting.

  • We can assist in the selection of your software and maintaining your books.

4. Track All Expenses

  • Keep receipts and categorize expenses (office supplies, travel, meals, etc.).

  • Use digital tools or apps to simplify expense tracking and reduce paperwork.

5. Stay on Top of Taxes

  • Understand your tax obligations, including income, payroll, and sales taxes.

  • Set aside a portion of your income for taxes—30% is a good rule of thumb, but every situation is different.

  • Work with us throughout the year to ensure stress-free, accurate filings and take advantage of deductions.

6. Monitor Cash Flow

  • Regularly review incoming and outgoing cash to avoid shortfalls.

  • Plan for slower months and unexpected expenses.

7. Pay Yourself

  • Decide on a reasonable salary or draw based on your business structure and profits.

  • Avoid dipping into business funds unnecessarily.

8. Reconcile Bank Accounts Monthly

  • Match your accounting records to your bank statements to catch discrepancies early.

  • This practice helps identify fraud and errors.

9. Create a Budget

  • Plan for monthly expenses, marketing, and growth opportunities.

  • Stick to your budget to maintain financial discipline.

10. Consult a CPA Regularly

  • Work with an accountant to review financial reports, plan for taxes, and strategize for growth.

  • A CPA ensures compliance and helps you make informed decisions.

  • Get in touch with us before a small problem becomes a big one. We will help you explore these options and make a game plan for success. The sooner you address it, the less stress you will experience.