By far, accurate accounting is the most important aspect of starting and running a small business. Although it’s easy to get caught up in designing a website and creating your online presence, you’ll never survive if you don’t have a solid understanding of how to crunch the numbers.
Keep Accurate Reports
When you own a small business in Salt Lake City, or anywhere else for that matter, accurate record keeping is a must. No matter or large or small, start by detailing daily ledgers. Most of your day-to-day accounting details can be tracked online via banking records and credit card transactions. However, you also need to keep all of this information organized for future use.
Open a Business Account
Never mix your personal and business accounts. Even before your open for business, you need to open a business bank account. Make sure to open it under your company’s name, not your legal name.
If your business is a sole proprietorship, you aren’t required to open a separate account, however, it’s still a good idea. Don’t forget to register your business in the state where you live as well.
Keep Your Receipts
Sure, you might think a taxi cab receipt is useless, but the IRS may think otherwise. In fact, by not saving all of your receipts, you may be selling yourself short. As a business owner, you need to keep all of your receipts for small business accounting purposes.
Learn How to Invoice
Another facet of small business accounting is learning how to properly invoice. Inaccurate reporting can lead to discrepancies at tax time. Keeping accurate invoices also lets you see who has paid in full and who hasn’t. Finally, knowing how to create invoices also means that you can immediately bill for services rendered.
Hire a Small Business Accountant
As a small business in Salt Lake City, your main goal is to make money. To keep costs low, a lot of entrepreneurs start their businesses as a side hustle and work at home. If this is the case, then hiring a Utah CPA might not be feasible.
Until you start seeing a higher ROI, you can either keep track of everything on your own, or you can enlist the help of a part-time bookkeeper. Then, as your business starts to grow, you can then bring on a full-time accountant to help with day-to-day transactions and end-of-year reporting.
Starting your own business can be exciting and frightening at the same time. The key is success relies heavily on what happens behind the scenes. Before you open the doors for business, make sure you’ve done the legwork; i.e. bank accounts, liability insurance and speaking with a Utah CPA.
Even if you don’t need financial help now, once your company starts to see a profit, you’ll be happy that you’ve got one on board. Most importantly, don’t sweat the small stuff. Becoming a successful entrepreneur takes time, patience and hard work.