Accounting 101: How to set your business for success?
You just launched your business. Congratulations! It takes a lot of effort and courage to reach this point where you are at right now. In order to put your company on track to achieve growth, it’s essential to establish an adequate accounting setup.
How to track your money effectively? You need to follow some accounting tasks, but which ones? An online bookkeeping service is just what you need to automate your financial admin, manage money and develop an accounting setup that works best for your business needs.
Needless to say, to succeed in business nowadays, you need great organisational skills and flexibility. Most people start their business thinking that they’re just turning on their computers or laptops and making money. In reality, it’s a lot more difficult than they think. That’s why you need to be prepared to face some challenges, like setting up your business finances and dealing with accounting tasks.
In this article, you’ll learn how to set up your finances as best as possible and achieve business success.
Opening a Business Account
As soon as you finish registering your business, it’s time to know where you’ll keep your income. Some corporations are legally required to keep their income in a separate business bank account. Although it’s expected to know how to manage your personal and business income in the same bank account, it’s strongly advised not to do so.
Why? Keeping a separate bank account will make taxes far less complex. You won’t have to worry about untying your personal and professional expenses as well. Your business transactions will be kept safely in a separate account.
In addition, managing your business income in a separate bank account allows your accountant to keep track of finances and improve your business's financial health easier.
How to Do It
Shop around and select a bank that’s easy to access, both online and offline. Do you have a branch nearby? Make sure it provides you with precisely what your business needs. The bank should ideally offer online banking and work with your POS system and other technological demands. Please make sure you are totally aware of how much the bank will charge you monthly as it must be something affordable and that suits your needs.
Open a Business Savings Account
Opening two business accounts means keeping your money well-organised. For example, you can open a savings account. This will help you cover your taxes throughout the year, monitor your spending, make your money work harder for you, and prepare your business for future plans.
Generally, you will need a business logo and a registered business to open these accounts. Also, before you open your business account, check your bank of choice and determine what type of paperwork you need for your appointment.
Business Credit Card
Business credit cards help build your business’ credit rating. It’s essential to select the correct card type and enjoy the other benefits, like cashback rewards, when making business purchases. You can keep your business card in a digital wallet – it’s an efficient way to consider your options and find a suitable business credit card for your business needs. It’s essential to keep in mind that corporations are legally required to have credit accounts separate from their accounts.
Accounting Software
The best way to help your business successfully manage accounting software and finances is with QuickBooks. Accounting doesn’t have to be complicated or scary for a business, and neither does finding good accounting software. There are plenty of full-featured accounting programs that are easy to use and can help your business achieve success by controlling business finances. QuickBooks might be a great fit for your business in terms of features. Dealing with accounting software might be daunting for any business that is new to it, but the right accounting software can make things infinitely easier for you.
Be Aware of What Expenses You Need to Track
You need documentation to prove your income, credits, and tax return. Although records and receipts depend on the nature of your business, generally, you may consider keeping the following:
Invoices
Receipts
Bills
Proof of payments
Cancelled checks
Financial statements from your bookkeeper
Any other documentation evidence that supports verification of income, tax return, and deduction
Payroll and Business Finances
Choose an easy way to pay your employees. With payroll software, payday will always look good. This software can save you time, as staff can access their payslips from anywhere. It pays to be informed, so check the page and discover everything you need to be an authentic leader.
Establishing a Bookkeeping System
Bookkeeping – just a few owners know what it is and love to do it. But each business owner is required to do it. Before diving into the subject, it’s good to see the difference between bookkeeping and accounting. If you’re thinking about hiring a bookkeeper or an accountant, you need to know what your business needs first. Bookkeeping is the administrative and transactional role that manages daily tasks, including financial transactions, receipts, purchases, and payments. Accounting provides business owners with financial insight on data obtained from their bookkeeping.
Bookkeeping is a constant task that needs to be completed each month so that your financial statements are in place. It will also help you understand how your business is performing. If you’d like to manage books yourself, simple accounting software or a great Excel spreadsheet can help you get there. But if you prefer to spend your time on other essential business tasks, having a bookkeeper may be perfect.
Even though running a business may seem overwhelming, innovative strategies can help ensure that the path is smooth and the future is prosperous. Accountants help businesses with daily operations and offer monthly training and analysis of financial reports. This analysis helps managers make informed decisions with the updated data. Accountants can also help by overseeing payroll and estimating tax payments throughout the year.
