That day finally came. The domain has been secured. The ads have been place. The business is coming in! Now what? How do I keep track? What are the most important things to do?
The questions are the same for any business owner, and the answers to those questions will form the basic structure of any business accounting system. These questions are:
• How much did I make?
• How much did I spend?
• How much do I have left?
• What do I do with all of this at tax time?
For any new small business, record keeping may be a simple process, and for some, assistance in the form of software, or a bookkeeper may be needed. In most cases, the volume of business will dictate which alternative to choose.
The simplest solution is to use a spreadsheet, with the goal being to capture every dollar made, along with every dollar spent. Depending on the size of the business, this may prove to be good enough to get the job done. Providing this spreadsheet to most accountants at year end will give them enough information to be able to put together a tax return. However, the more work the accountant does, the higher the fee tends to be.
As the volume increases, many small business owners make the decision to purchase software to help them keep track of the daily ins and outs of their business. There are several good programs out there to choose from, and a little bit of time with Google will provide a list of the many options. Choosing a program that will be easy to use is the key to continued success. Simple math – If you can’t figure it out, you won’t use it! Quickbooks happens to be a favorite of mine because it is easy to learn, and easy to use. Learning two basic functions of any software will provide 90% of the knowledge needed to use the software daily.
• How to enter a deposit of earnings
• How to record business expenses paid
These first two alternatives are good solutions for the owner who can manage this part of the business himself/herself. The third alternative is to hire someone to do the work FOR you. If the business has grown, or if you just want a professional’s help, then an outside bookkeeper may be the right choice. Hiring a competent professional for this important job is the key to getting accurate reports that will help guide your business. Your accountant can be a great resource for help and recommendations if this is the direction your business is ready to take.
If you are interested in learning more about Pease CPAs’ Client Accounting Services and how we can assist you in growing your business, please contact Kathryn Drake, CPA, CGMA at firstname.lastname@example.org.