EA - Accounting Checklist - Essential Tasks for New Businesses and Startups

Accounting Checklist: Essential Tasks for New Businesses and Startups

It is both exhilarating and scary to start a new business. You have an idea for products or services that will be popular in the market, and you’ve come up with the cash to get the company off the ground. While you are building the business and launching it into the world, it is important that you follow this accounting checklist to ensure that you are meeting all financial requirements for your company.

Yes, bookkeeping and accounting can be daunting. Most business owners want to spend their time focused on product development, marketing, customer outreach, and other tasks that have a direct impact on cash received. While these tasks are important, you need to be sure that you have a solid financial plan in place to set your company up for success in the future. Failing to take care of these essential tasks on your accounting checklist could cause your business to fail due to poor practices and a lack of cash flow.

Even though accounting and bookkeeping can be time consuming, you don’t have to put in the hours to take care of these tasks. One of the best things that you can do as a business owner is to hire the right contracting service to handle these details. You’ll have a better outcome and be proactive in protecting the financial interests of your company.

Consequences of Neglecting Your Accounting Checklist

What will happen if you neglect the important tasks on your financial to-do list? At first, you might not encounter many issues. But these problems tend to compound over time, resulting in big problems in the future that could take your company down.

While tax and financial compliance are time consuming, it is a critical part of building a solid foundation for your company. These tasks give you the information that is necessary for making accurate decisions for your business. Plus, you can avoid hefty fines and an expensive tax burden by implanting a good financial strategy.

Not only do you need to be educated on the right accounting practices for your small business or startup, but you also need to develop the right systems to ensure ongoing compliance and maintenance. The following tips will help when you are launching a new company so that you can build a financial picture for success.

Step #1: What Accounting Services are Needed?

The first step is to learn about the industry and identify the accounting services that will best suit the needs of your new business. Why does accounting matter? These financial reports give you accurate information that affects the decisions that are made for your business. Additionally, you need to comply with legal requirements as outlined by the IRS.

The easiest solution to learn about your options for accounting is to talk to an accounting service for information. Yes, you can find details online with a Google search. But it can be overwhelming to identify the right accounting checklist for your new company. Instead, you need to lean on the services and expertise of someone who understands the best processes for small businesses.

Our accounting team can evaluate the needs of your company and provide recommendations that will suit your preferences. We want to be sure that your accounting services are a perfect fit to set your company up for success in the future. During this initial conversation, we’ll understand more about your business, growth patterns, and anticipated changes in the future. Then, this information will be used to create the perfect setup for your business going forward.

Step #2: Setting Up an Entity

Don’t overlook the important step of creating the right entity for your business. Various legal structures have benefits and drawbacks. As you talk to a legal professional, you can understand how these pros and cons will affect the long-term outcome for your business efforts.

During this step, you need to talk to both an accountant and an attorney. There are many intricacies of the corporate tax code, which can be overwhelming to a new business owner who doesn’t understand the legal jargon and other details that need to be addressed. But a good team of professionals can explain your options and help you in finding the solutions that will suit the needs of your company.

You can use this advice to determine the proper legal structure for your business. Then, the accounting and bookkeeping system can be structured to match the structure that has been created. Not only do you need to get the system set up in the first place, but there are also requirements for ongoing compliance. The easiest solution to handle these details is by engaging an accounting team for ongoing services.

Step #3: Financial Reporting and Ongoing Bookkeeping

Now that your business structure is in place and you have the systems established, it can be a trick to maintain consistency with the ongoing tasks that need to be handled. Ongoing accounting and bookkeeping requirements should include the tracking and categorization of all business transactions. Additionally, you need to have a separate business bank account created so that there is no crossover between personal spending and business expenses.

In this step, it is smart to invest in good accounting software. There is no reason why these transactions need to be tracked by hand. Instead, you can maximize the benefits of automation as much as possible, helping to reduce the problems associated with manual tracking and calculations. If you have questions about any of these transactions, then a tax advisor or CPA can review the information and offer advice about the best way to handle these details.

The step of creating the right reporting and tracking system is crucial in helping you avoid common mistakes. When mistakes are made with tax strategy, then often leads to heavy fines from both the IRS and the state. Good software will help with the creation and maintenance of financial statements.

Plus, you can use this information when making decisions regarding the financial health of your company. If you need to invest money in marketing or business development, you will be well-informed due to the information that is available in the reports. Enhanced financial forecasts can be valuable assets to help with the leveraging of your business efforts in the future.

Step #4: Be Prepared for the Future

You never know when you might be facing an audit, so it is important that you are proactive right now so that you are prepared for anything that might happen in the future. Good accounting practices make it easy to navigate a potential audit because all of the information is organized and clear. You need to have documentation to back up the write-offs and deductions used for your tax strategy. Additionally, you need to have a clear line of paperwork showing where your money is coming from when customers are paying for the products and services.

One aspect of preparing for the future is in the management of your cash flow to ensure that you are ready for slow months. It is inevitable that some months will be more profitable than others. Having a good financial strategy in place will give you the emergency savings that will carry you through the months when cash is tight. Sometimes you can anticipate these fluctuations, but other times the cash need is unexpected due to unanticipated costs and details that affect your business.

It is smart to have regular internal audits and bank reconciliations to ensure that all of the accounts are in order. A little bit of proactive work right now can go a long way to helping you avoid a big headache in the future.

Keep your records up-to-date and make sure that you are abiding by all of the financial regulations and laws in your area. There are many benefits that can come from engaging the services of an experienced accounting team.

Do You Need Accounting Services?

Most small business owners don’t have professional accounting skills to manage their business finances without support. You might attempt a DIY system, only to find that you encountered problems that could have been easily avoided by tapping into the services of an experienced accounting team.

If you want to set yourself up for success in the future, then the best thing that you can do is lean on the expertise offered by a small business accounting team. We are here to help with your accounting checklist to ensure that you are starting on the right foot. Then, our ongoing accounting services will support your needs going forward.

Easier Accounting is here to assist with anything that you need for your business financial tracking. If you are looking for small business accounting or bookkeeping services, then we invite you to contact us to learn about the services that are offered. We are just a phone call away when you need answers to your questions, and our team will explain the benefits that are available when you choose to engage the services of a small business accounting team: (888) 620-0770.

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