Starting your own business is exciting. It takes courage, determination, and planning to be successful. And a bit of understanding about business accounting.
One of the most important things to do in the early stages of your business is to establish your accounting systems and procedures. Here are some tips to help you get off on the right foot with your business finances.
One of the most common mistakes that I see as an accountant who helps business owners just starting out is not separating the business finances from their own personal accounts. Realize that your business is an entity of its own and should be treated as such.
Whether your business is a sole proprietorship or a corporation with multiple investors, the finances of the business should never be commingled with your own funds.
When you use the same bank and credit card accounts for personal and business use, it becomes difficult to keep track of which is which. A few reasons you should never commingle include:
Being organized with your business finances can greatly reduce the amount of stress you feel when starting your new business.
You have enough to think about during this process and running a business in general—you shouldn’t have to worry about where to find important documents or figure out how much you’ve spent on advertising. Here are some ways to get organized:
You might be savvy about managing your business finances and capable of doing many of the bookkeeping and accounting for the business on your own. But if you feel uncomfortable or unsure about what to do, find a qualified accounting professional to help you.
In fact, you should consider working with an accountant even if you are confident in your bookkeeping abilities. A recent study showed that small businesses were 89% more likely to succeed beyond five years when they worked with an accounting professional.
If you’re not sure where to find the right kind of help, check with your local SBDC (Small Business Development Center). They can help connect you to resources, from classes on basic bookkeeping skills and how to get started with QuickBooks, to referrals to accountants and other financial consultants who can help you get set and stay on track with your business accounting.