If you are in the process of launching your new business, congratulations are certainly in order! There is nothing comparable to the thrill of having your own enterprise, but of course, along with the thrill and perks comes a fair amount of trepidation. But whilst you have milestones to look forward to, as you go along your business path, you still need to take care of some aspects, such as your business accounting. The accounting needs of your business are set to grow once your business expands, and along with this will come certain complexities as well. But if you have a solid accounting base, it should be easier to cope with those new complexities. If you want to do it properly from the beginning, however, here are the basics on proper accounting for your business: what you should do and know.
- Make sure you have a bank account
The first rule is to make sure you have a bank account. We’re not talking about a personal one – it should be one set up solely for your business. Once you have registered with your local council, the next step is to open a separate account that will keep your business records separate and make it easier for you to file your taxes once the time comes. The relevance of your business account further extends to protecting your personal accounts or assets in case of a lawsuit, audit, or bankruptcy. Also, if you think you would require funding, later on, having a strong financial record for your business will increase your chances of getting approved.
You can opt to open a checking account first and then follow this with a savings account. You may also want to consider a credit card for your business to build and establish credit.
- Keep track of all your expenditures
This may be easier said than done, but you can do it if you have the proper know-how and dedication. The foundation of robust bookkeeping, after all, is to have accurate and effective tracking of all your expenses. It pays to develop a system for your vital records and receipts. Your receipts should include your entertainment and meals, business trips, costs related to vehicles and transport, gift receipts, and receipts for your home office (if you have a home office setup).
- Establish the appropriate system for bookkeeping
As confirmed by the expert accountants in central London from Griffin, Stone, Moscrop & Co, bookkeeping is different from accounting in that it is the daily process of noting down your transactions, separating them into categories, and reconciling them with your bank statements. Accounting, on the other hand, is next-level – it considers the progress of your business and makes sense of whatever data you have compiled in bookkeeping.
If you want to keep and maintain your books as accurately as possible, you can go the old-school route and make use of Quickbooks or even just Excel. But you can also use the expertise of a bookkeeping service. Once your business is growing, it may be wise to consider the services of an accountant as well.
Aside from taking care of the above, you need to establish your payroll system and figure out deadlines and procedures in the filing of your tax returns. But with knowledge and the proper help, you can do all these – and make sure your business is right on track.
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