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There are 3 Actions to Take While Starting a Business. Record the use of personal funds for business expenses, keep receipts for all of your expenses, and pick a bookkeeping method. Being excited about starting a new venture is good because that means you are motivated. However, in the scheme of things don’t forget to keep track of instant expenses that occur when starting a business. I’m a bookkeeper, so of course, I encourage hiring a bookkeeper from the beginning stages of your business. It might not feel like a reasonable expense at first, but putting it off can cause more effort later.
Keeping Track of Your Business Expenses
Record the use of all the personal funds you are using for your business. While starting a business without any loans or investors, you will end up using your funds to buy business items like software, permits, and office supplies. For instance, if you are a hairdresser, a tattoo artist, a handyman, or a baker who is opening your own business instead of working for others you will need many tools to start; therefore, before funds start rolling in be sure to keep track of money spent. These items will get added into your bookkeeping records.
Keep receipts from all of your business expenses. Any income, deductions, or credit amounts that you claim on your tax return needs to be kept for documentation. The irs.gov has a list of Period of Limitations that apply to income tax returns. While starting your business, I suggest making files for all the vendors you have begun using and continue to add on as you go. An example of a vendor I have used is Barnes and Noble because I bought a book about QuickBooks.
Pick a bookkeeping method that works for you. As I’ve stated in my post 3 Reasons Why You Need a Bookkeeper All Year, it is essential that you keep a bookkeeping method. For those new business owners that have not started any bookkeeping, I encourage using a notebook, an Excel or Word sheet. If you are not afraid to use software QuickBooks is my go-to software, but there are many others to choose from like FreshBooks, and Wave.
Business Receipt Tracker
I have made a free printable PDF for your business receipt tracking. You can use this tracker for all expenses you begin accumulating before earning money and while you are using your own funds. Even though you will be filing your receipts, the business receipt tracker will assist you or your bookkeeper when you start claiming and recording your expenses for the end of year tax filing. Realistically you could use my PDF for all receipts if you have not started a bookkeeping method, but again I encourage you to use a bookkeeping method once you begin receiving income.