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There are 3 Necessary Actions for New Small Business Bookkeeping. Record the use of personal funds for business expenses, keep receipts for all expenses, and pick a bookkeeping method.
Being excited about starting a new venture is a natural feeling. Excitement creates motivation and helps to get your new small business off the ground right! Just be sure to keep track of 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 money and effort later.
Use the actions below while starting your new business.
3 Necessary Actions for New Small Business Bookkeeping
Record New Business Expenses
Record the use of all the personal funds you use for your new small business. Examples of using your personal funds for a new small business venture could be permits, business license, and office supplies.
Any new business venture starts with personal funds, a loan, or an investor. Most entrepreneurs or small businesses use the funds from the owner of the company.
Before funds start rolling in be sure to keep track of money spent. These owner expenses will be added into your bookkeeping records for the company.
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Keep receipts from all 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.
Business expense receipts are any expenses you will include in your bookkeeping for the business like a business license fee, computer, accounting software, etc.
Choose a Bookkeeping Method
Choose a bookkeeping method that works for you. I continue to encourage choosing a bookkeeping method from the beginning of your new venture.
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 accounting software use QuickBooks Online or other accounting software like FreshBooks.
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In conclusion, start your business and bookkeeping off right by doing these 3 necessary actions for small business bookkeeping. Yes, they may seem basic, but they are important when starting out. You definitely don’t want to miss out on deductions for taxes while keeping your records up to date.