Whether you are just preparing to start your own business or you have recently opened your doors, learning how to do accounting is probably at the top of your to-do list. Good thing, too, because without proper accounting methods, your business is bound to fail. But, where do you even begin?
There are a lot of logistics involved with managing the finances for your business and you want to be sure every decimal and dollar sign is in the right place. That’s why we’ve put together this quick and handy guide for how to do accounting for a small business. Keep reading to learn more.
How to Do Accounting for Your Own Small Business
Long before you started your business, you had to come up with ideas for funding it and paying associated fees. But that doesn’t make you a master with the finances. And, there is always room for improvement.
Let’s take a look at the most essential factors surrounding small business accounting.
Bank Accounts
If you don’t already have a business bank account, this is your first step. You’ll need a business checking and savings as well as an account specifically for taxes. Make sure you shop around for the best rates and services to ensure that your accounts have the best returns.
Tracking Expenses
Deciding on software to track expenses is a good start. Consider Xero vs QuickBooks if you still haven’t found one that works for your purposes.
When you have settled on software, you’ll need to categorize your spending by expenses like meals and entertainment, travel, and vehicle maintenance.
Bookkeeping
Small business accounting services often include bookkeeping which can take a lot of stress off your plate. But, Xero and QuickBooks are also great tools to keep track of transactions and reconcile bank statements.
Payroll
Learning how to do payroll accounting can also be stressful without implementing a program to record hours and process payments. You’ll also need to consider how to handle taxes for your employees.
Taxes
Taxes are one area of accounting that you don’t want to mess up or you could end up with the IRS knocking at your door, or worse. You can do your own taxes if you’re self-employed of course. It’s a good idea to hire a tax lawyer to ensure that all of your claims and obligations are accurate from the start.
Final Thoughts
Quit scratching your head wondering how to do accounting. Just keep these tips in mind to get the process moving in the right direction and you’ll start to find your groove in no time.
Of course, accounting is one of the most important aspects of your business and should not be taken lightly. If you still have questions or concerns, it might help to hire a financial advisor, at least during the beginning stages of getting your business off the ground.
Stop back when you have time for more tips and tricks about running your small business.