Written by: Jennie Stowe, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise
Despite the crazy economy we’re dealing with, a staggering number of people are starting their own businesses. If you count yourself among these proud new business owners, make it your priority to keep accurate records from the get-go! Believe me; you’ll save yourself a lot of time, stress, and money down the road. Understanding finances can be a real hurdle for many of us, so here are 3 steps to start your business on the right foot. Let’s dive in!
1. Separate your business finances from your personal finances.
It’s a simple step that will bring so much clarity to your business. Please! No more buying business supplies on your personal credit card … or depositing a business check into your personal checking account. This clutters your life and makes accurate records nearly impossible.
Thankfully, this is easy to address: go ahead and set up a business checking account, then if needed, open a business credit card as well. You can knock out this step in an afternoon, so nothing is holding you back. If you’re a sole proprietor, this is a great first step … for everyone else (LLC, S Corp, etc.) it’s also a legal requirement!
2. Keep basic but accurate records of all financial transactions.
You’ll be using these records for tax prep as well as for business purposes. Come tax season, the government won’t take kindly to numbers that don’t add up … so accuracy is key!
If you can’t fit bookkeeping into your budget, start with a simple spreadsheet so you can at least see your monthly profit/loss. Even if you’re not a computer wiz, it’s easy to create a spreadsheet that tracks categorized income and expenses for each month. Going a step further, there are also some free bookkeeping softwares available, but be aware that these are pretty limited in capacity, and you’ll need to upgrade quickly as your business grows. Free is welcome as a new business owner trying to make a profit, but true quality nearly always comes with a price tag.
When you can afford to spend a small monthly fee on your bookkeeping, then check out an online bookkeeping software. I personally use QuickBooks Online with all my clients; they offer a more budget-friendly option that’s great for small service providers. Whatever software you decide to use, do some research and find an online training to make sure you understand how to keep your own books within that software properly.
3. Save all your receipts.
You can save them the old fashioned way in a shoebox or folder, but receipts fade and take up space over the years. For that reason, I recommend saving them electronically. You can scan paper receipts and save them along with emailed receipts in a Google Drive folder or similar cloud-based method. You can also subscribe to apps like Receipt Bank or Hubdoc for receipt management. If you’re using QuickBooks Online for your bookkeeping, you also can access their easy receipt management that integrates right into your books.
Even as a busy business owner, you should easily integrate these three points into your business. A few minutes now will save you hours and money down the road. In summation, start your business following these three bookkeeping guidelines to set yourself up for success!
Separate your business finances from personal.
Keep accurate records within your budget.
Save your receipts.
Best wishes to your business!
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Jennie Stowe, Executive Contributor Brainz Magazine
Jennie Stowe lives in Tennessee with her husband and son. She is a Certified Bookkeeper and QuickBooks ProAdviser who helps female service providers with their bookkeeping so they can focus their time on booking more clients and making more money. Solid bookkeeping is vital for a business's success, so Jennie offers resources for every budget! Those small businesses that can't yet afford a bookkeeper are covered by her online course: Keep Your Own Books - The Entrepreneur's Guide to Small Business Accounting.