Starting a new business can be tough, but entering into the world of accounting can be…well, a whole other story.
As a professional accountant, I’ve worked with several entrepreneurs to help them balance their books, keep their businesses organized, and understand the important health metrics that can come from their finances.
But trust me, I understand that not everyone has an accountant to go to for the basics.
That’s why I’m sharing my decade’s worth of knowledge with you. From getting a business license & setting up a business credit card, to running payroll & invoicing your clients, I’m walking you through entrepreneurial bookkeeping 101 with my new business checklist.
Business Needs vs. Wants (and everything in between)
When it comes to setting up your business there are some things you need, some things you’ll want, and a few things you’ll need to ask yourself.
When it comes to the necessities, you’ll need to lock down the following:
- A business license
- A business bank account
- A budget
- An accounting system
- A sales tax license
- A late fee policy
When it comes to the optional nice-to-haves, you should consider:
- Forming an LLC (limited liability company)
- Getting a business credit card
- Which payment methods you’ll accept & how
For a deeper dive into what you need and what you should consider, click here to download my guide.
Your new timeline
Now that we’ve nailed down the what, let’s clear up the when. Here’s how to identify how often you should be executing your bookkeeping basics.
- Run payroll: This can be automated to run if you are paying someone a consistent amount on a regular basis.
- Invoice your clients
- Record all cash activity from your business bank account or credit card
- Remit sales tax (if applicable)
- Business loan reconciliation (if applicable)
- Accounts receivable review
- Accounts payable review
- Bank reconciliation
- Reserve for income tax: I always recommend reserving for income tax, as you go. This is an effective way to manage your chase so you’re not scrambling during tax season. The general rule of thumb is to set aside 15-20% of your net profit, though you may need more or less, depending on your business. I recommend finding a CPA who specializes in taxes to calculate this amount for you (I’d be happy to make recommendations!).
For a deeper dive into when you should be doing what, click here to download my guide.
Setting up your business for success doesn’t have to be hard, and you don’t have to do it alone. Need some help? Schedule a free 15 min consultation with me where we can understand where and how your business can become more profitable & organized.