Making The Most Of Your Money

Starting A Small Business Next Year? 3 Accounting Basics You Need To Know

4 December 2018 by Glen Robinson

If you plan on starting a small business next year, you need to know the basics of accounting for small businesses. When you start a small business, you want to make sure that you get started on a strong financial footing.

#1 Set Up A Bank Account for Your Business

The first thing you need to do is set up a bank account for your own business. Although you can use your personal bank account for your business expenses, that would be a mistake. You want to start your business out on the right footing.

Opening up a business bank account will help you to accurately keep track of your business transactions. With a business bank account, you will be able to more clearly keep track of all of your business expenses and keep track of the money that you are bringing in. A business bank account will let you really see how your business is doing and will help you establish boundaries between your personal and business finances.

#2 Label All of Your Expenses

Keeping track of all of your expenses is really important. Your expenses are taken away from your overall profits. Keeping track of your expenses will allow you to see how much money you are actually bringing in and making.

Keeping track of your expenses is really important when it comes to doing your taxes. You are taxed on the overall money that you make on your profits. You will only know what your profits are if you keep track of your expenses.

There are also certain expenses that you can write off on your taxes, such as travel and business expenses. Once again, you can only write these off on your taxes if you take the time to keep track of them from the beginning.

There are lots of programs and even apps you can use to take pictures of all of your receipts and categorize your expenses, so this doesn't have to be a time-consuming process.

#3 Set Up Your Payroll

Finally, you need to set up your payroll if you plan on hiring any employees. You can purchase software that you can use to help you process your payroll, or you can outsource your payroll to an accounting firm that offers small business accounting services. It is important to get your payroll right. You have to pay federal and state taxes with your payroll, and it is important that you get those contributions right.

As you start your small business in the new year, be sure to set up a dedicated bank account for your business. Keep track of all of your expenses from the beginning, and get professional help setting up your payroll.

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