–All businesses run on creative ideas, energy, and finances and too often, new business owners put good accounting practices on the back burner when they are focusing the creative processes. Robert Borish, CPA and tax preparer in Irvine said, “It’s important for new business owners to take the time to establish accounting practices and strategies that are easy to manage in the beginning and that will grow with the business.”
Taking the time right away to start following solid accounting practices saves headaches at tax time, makes managing growth easier, means projections are more accurate and helps avoid underfinancing, which is one of the leading causes of business failure.
The leading tips to help new business owners start off with the right accounting practices are:
- Dedicate a day and time every week to record financial activity, receipts, invoicing, bills and credit card and banking activity. Sticking to the time you’ve set aside prevents a backlog.
- Automate accounting and hire a professional accounting service: Accounting software is a great tool for keeping track of receipts, bills, bank accounts and other financial information. Working with a professional accounting service, especially one that provides online accounting services is an excellent platform for getting the most from accounting software. Accounting firms like Robert Borish, CPA, Inc. not only provide online services, but also help small business owners set up Quickbooks, the leading accounting software platform, and train them to use it.
- Hiring a professional accounting service allows you to focus on managing and growing your business and reduces your start-up overhead. A professional service eliminates the need to hire additional employees for bookkeeping, accounting and payroll so the start-up business can direct resources to other critical resources.
- Separate personal and business expenses: When starting out, the temptation to mingle business and personal finances might be tempting just for convenience, but it can create more problems than it solves; especially where taxes are concerned. This is not to say that some business owners cannot benefit personally from some business expenses. This depends on what kind of business entity was established when you set up your business. Even then, it is best to have separate personal and business bank accounts and credit cards. If you are contributing capital to your new business from personal assets, make sure those contributions are clearly documented. Likewise, if your business reimburses you for out-of-pocket business expenses, make those reimbursements are clearly documented.
- Track every business expense and keep accurate records of expenditures, payroll and labor costs, inventory, invoices, accounts payable, vehicle expenses, rent and utilities, insurance. In short, keep a record of everything.
- Accurately record business income as it is received. Record daily sales receipts and any other payments to your business.
- Creating financial projections helps you track the state of business at any given moment. Projection reports can identify upcoming expenses that you need to prepare for, help you accurately measure growth so you can meet growing demands for your product or service without overextending, and help you forecast business downturns that might be on the horizon so you can prepare for them. Projections also help give you realistic growth goals.
There are no shortages of details to consider when operating a new business. Getting control over the accounting practices right in the beginning is critical to how your business operates going forward. It might seem easier and more economical to keep your own books in the beginning but as your business grows and as tax time approaches, you might start feeling overwhelmed.
Even if you are going to keep your own books temporarily, meet with an accountant for the proper guidance and retain an accountant to periodically audit your books and prepare your taxes. The benefits are going to far outweigh the expense.
Robert Borish, CPA can create customized solutions for your business. Services include tax preparation, payroll processing, bookkeeping, accounting and even Quickbooks classes for current clients. Contact Robert Borish for business strategies and tax preparation at the Irvine office.
Robert Borish, CPA, Inc.
6 Venture #120
Irvine , CA 92618
This press release is by Paso Robles SEO and online marketing company Access Publishing, 806 9th Street, #2D, Paso Robles, CA 93446, (805) 226-9890.