EA - Accounting Steps to Set Your New Business Up for Success

Accounting Steps to Set Your New Business Up for Success

The systems and processes set up in the newest stages of your business will have a profound impact on the long-term success of your company. It is an optimal time to implant a solid foundation that you can build on for years to come. One of the most important aspects of financial success is to implement specific accounting steps so you can track income and expenses within the company.

If you don’t have a formal background in finance or business management, then these accounting steps might not seem intuitive. Too often, new business owners assume that they can maintain their focus on customer acquisition and product development, and then deal with the financial details later. Yes, you can choose to leave accounting and bookkeeping on the backburner… but you need to consider the long-term consequences that might be faced by ignoring these important elements of running a business.

At Easier Accounting, we understand the importance of following a proven financial system when starting a new company. Our team is here to assist with the essential accounting steps, helping you create an effective system that will serve the needs of your company – now and in the future. You are welcome to contact us at any time if you are interested in learning more about how these available services can have a positive impact on your new business.

New Business Idea, But Don’t Know Where to Start?

Starting a new business can be both exciting and overwhelming at the same time. You probably feel like you have a long list of to-do items: business registration, local licensing, product manufacturing, website design, accounting systems, and more.

Don’t let yourself be paralyzed by all of the things that need to be done. Instead, consider the benefits of tapping into information and support offered by experts. Finding specific skill sets to support your business needs can be an invaluable way to share the responsibility. As a result, you don’t have to navigate the rocky road without support.

Our team at Easier Accounting specializes in financial systems for startups and small businesses. We are here to guide you through the accounting steps to create a solid financial system that will support the needs of your company. Here are a few important steps to follow:

  1. Open Business Financial Accounts: Even if you are starting as a sole proprietor, it is important that you have clear boundaries between personal spending and business spending. You need to know where your income will be going and how you will be paying for business expenses. Keeping the business finances separate makes it easier to track the results of your business efforts, and it is much easier to gather applicable information for your accountant when tax time rolls around. Choose a financial institution that you would like to use and find out what is needed to set up a business bank account. Set up a business savings account, checking account, and even one or more credit cards that can be used if needed.
  2. Track All Expenses: The costs can add up, especially when you are getting the business off the ground. Implementing these accounting steps in the earliest stages of your business efforts means that you will be able to maximize available tax write-offs. If you want to claim the deductions, then you need to keep records of the money that is spent for business purposes. A good accounting system can be an invaluable asset in tracking every expense for your business. Also, hold onto any related paperwork, such as receipts, bank statements, canceled checks, bills, proof of payment, invoices, financial statements, 1099 forms, or any other documents related to income or expenses. Get in the habit right now and you will find it easier to maintain the momentum of tracking every transaction and keeping every document.
  3. Implement a Bookkeeping and Accounting System: Using proven computer software can be a valuable asset to track all of the transactions moving through your account. The easiest way to get started with a bookkeeping and accounting system is to hire an accounting expert who can help you line up the financial accounts and integrate everything with your point of sale systems. Not only should you start using accounting software as soon as possible, but it is smart to have monthly services that help you keep up with reconciliations and ongoing bookkeeping. It is a time-consuming and boring task to monitor all of the business transactions, which is why you are smart to outsource these tasks to an experienced small business accounting team.
  4. Payment Processing: Two details need to be considered when it comes to payment processing. First, you need to have a system in place to receive payments from your customers. Next, you need to consider how you will be paid and how the money will be provided for contractors, employees, and accounts payable invoices. Most businesses don’t manage only on cash. You need to have a digital system that can be used to accept payments through mobile apps and/or credit cards. These systems ensure convenience for your customers when they are ready to buy the products or services that are offered. Will you accept online payments only? Or do you need to have the option for in-person payments as well? These details will influence the type of system that is selected to match your business needs. At the same time, you also need to have a streamlined system in place to ensure that you are keeping up with payroll and other bills that are due throughout the month.
  5. Payroll Processing: Setting up a payroll system deserves a mention on its own because of the importance of taking care of your employees. Payroll processing is a bit more complicated than providing a credit card number to pay a bill. This necessary task requires withholding calculations, ongoing deposits for tax payments, benefits calculations, and more. While there are payroll processing software systems that can be used, it is best to work with an experienced payroll provider for assistance. Consider hiring an accounting team that offers both payroll processing and tax strategy so you have the convenience of all financial services from one provider.
  6. Design a Good Tax Strategy: Now is the time to hire an experienced tax accountant who can assist with your tax strategy throughout the year. There’s no need to hire a full-time accountant in your company. Most small businesses don’t have the cash or resources to pay for the accountant’s salary. Instead, consider the benefits of outsourced accounting so you can talk to a tax pro without the need to carry the overhead costs. As you are choosing accounting services, it is best to pick an accounting provider that understands your unique needs and specializes in small business services. Tax strategy varies depending on the type of company and the size of the business. A small business accountant will know proven methods that can be applied to your business, which will optimize your overall results.
  7. Systems for Monitoring Business Profits: It is essential that you monitor profits and losses throughout the year. Even though you might feel like your business is doing well, it can be a surprise to look at the numbers and discover that your margins are tighter than you thought. Implement accounting reports so you can see how much is going out and how much is coming in. This data can help you evaluate the true costs for the production and sales of your goods or services. Then, you can determine if your pricing is accurate to ensure that you are staying in a profitable space with your business efforts. Also, keep in mind that good financial reports are essential if you decide to bring in outside investors in the future. You need to show the history of the company’s success before people will be willing to invest in your business efforts.
  8. Ongoing System Upgrades: Following these accounting steps will ensure that you start in the right place with your new business venture. But you should never assume that your new accounting and financing strategies will last forever. The truth is that you should always be monitoring the effectiveness of your accounting systems. If weak points or areas of opportunity are uncovered, then you can tweak the system to ensure that you are maintaining the highest levels of performance within your company. An experienced accounting team can assist with the ongoing management and maintenance needed for your business financial systems.

These accounting steps show an overview of what you need to be doing for your new business. It is common for business owners to have questions about how the details should be implemented based on the unique needs of their company. If you are interested in learning more about your options, then our team at Easier Accounting is always just a phone call away. Contact us to discuss available accounting services and how this support can have a positive impact on your business success. Call our team at (888) 620-0770.

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