When you are on the verge of starting your own business, there are a lot of things to take into consideration. One of the most important is your business accounting. It takes a few steps to get started, and completing these steps is an important part of your path to success. The first step is to open a business account with your bank. Note that your business must be legally registered before you can take this step. If you are going into business with someone else, you are required to have a business bank account. 

It’s best to start by establishing a checking account for your new venture. But you’ll also want to take it one step further and open a savings account as well. When it comes time to pay taxes on your business, you’ll appreciate having a savings account. Once your business is up and running, every time money comes into the business, you’ll want to put some aside in savings. In general, you’ll want 25% of the money that comes in to be saved in the bank. 

 After establishing checking and savings accounts, it is time to looking into getting a line of business credit. It is not recommended that you use your own personal credit cards for your business. What is recommended is comparing lines of credit from several different lenders to determine which one is the best fit.

The next step in the process is to ensure you always track every business expense incurred. This is the time to devise a system to keep all business receipts organized and easily accessible. You can choose to keep physical copies or store your receipts digitally, using programs such as Shoeboxed. U.S. law states that a business owner must keep receipts for any purchase of $75 or more, though it is smart to keep receipts even for smaller purchases. 

The best way to stay organized is to have a bookkeeping system implemented on day one of your business operations. This means deciding which accounting method to use; accrual, or cash. For more advice on business accounting please get in touch with Painted Horse Financial.