When I started Hill Bookkeeping & Consulting in 2015, I remember how excited I was. I finally had something unique I could call my own. However, nothing truly prepares you for the growing pains of being a new business owner. Sure, knowing the ins and outs of accounting and bookkeeping helps, but that knowledge is nothing without execution and discipline.
With that in mind, let me share some accounting tips for first-time business owners.
Accounting Tips for First-Time Business Owners
Treat Your Work – and Yourself – Like the Business It Is.
Open up a business bank account. Track your income and your expenses. Also, don’t forget that you’re a business! Knowing that you’re an expert in your field, close ones may ask for the “friends and family discount.” Know your worth, and don’t give a discount without getting something in return.
Don’t Mix Your Money.
As one of my most crucial accounting tips for first-time business owners, keep personal expenses personal and business expenses in your business account(s). Commingling funds can make your books hard to unwind. Attempting this clean up without the help of a professional can get messy. Not only will it be time consuming, but it can also get expensive. Also, be careful how you use PayPal and Venmo in 2022 for personal transactions. Using those third-party processors too much will flag your activity as business-related.
Use Accounting Software.
QuickBooks is the industry standard, and they have inexpensive cloud-based programs that offer a wealth of features for a steal of a price. For instance, QuickBooks Online will save time down the road. The software allows you to put all your information where you need it. and get set up the right way and there's less to undo/fix in the future.
Have a Receipt Management Process.
We say it to clients until we’re blue in the face: save your receipts! Use a program like AutoEntry or QuickBooks Online or simply scan and save electronically (especially since receipts aren’t coffee-proof).
Automate Your Invoicing and Payment Process.
Instead of chasing after the money, create the ability to have money come to you. You can start with QuickBooks Online to help automate invoices to be sent automatically and/or to set up payments to debit your clients accounts automatically. If you must use another processor, make sure it has reports that you can hand to your bookkeeper or accountant to make record keeping easier.
Create a Specific Workflow.
As a self-employed business owner, you have to create good habits. Being organized and proactive will help you. Procrastinating will hurt you. Uploading your receipts in a regular process—daily or weekly—will prevent them from stacking up and having to spend hours catching up.
Use a Mileage Tracking App
Track all of your business-related drives. Apps like MileIQ or Everlance are trusted options for tracking mileage. Even if you plan to itemize your auto expenses, you’ll have to track the date, starting location, ending location, distance driven, and the business-related purpose of the trip. Also, remember that commuting to your office doesn't count.. Using these apps is a great way to ensure you won’t miss anything.
Plan This Year for Next Year.
As a business owner, it takes foresight to survive and thrive. Look ahead and see where you want your business to be. Set goals, mark your progress against them, and work with a CPA to build out a tax strategy so that you don’t owe a whole bunch of money at the end of the year.
Need Bookkeeping or Business Consulting Help?
You’ve taken the plunge and started your own business. Hill Bookkeeping & Consulting is here to do more than just provide accounting tips for first-time business owners. We’re here to help you maximize your business’s efficiency. Whether that means helping you set up your books, making sure you have the right software, providing a professional second set of eyes on your numbers, improving profit margins, or organizing your books, let us be your trusted advisor. Book an intro call today!