Everything Entrepreneurs Should Know about Accounting
Guest Blog by Aaron Schaffer of Tatkical Mail….
Entrepreneurship presents new business owners with the opportunity for nearly unlimited success, so it’s no surprise that even at a relative low point, more than 400,000 new companies are still created annually. Whether it’s the flexible schedule, the ability to set your own goals, an impact of coworking spaces becoming more popular, or simply the chance to succeed on your own, entrepreneurship attracts people for a variety of reasons.
On the other hand, few entrepreneurs and small business owners are prepared for the unique challenges and difficulties that come with creating a company from the ground up. Without dedicated departments for things like accounting, marketing, or sales, entrepreneurs are forced to learn a variety of new skills. These accounting basics will help you build your startup into the company of your dreams.
Stay on Top of Transactions
At some point in the life of your business, you or an employee will likely use personal funds to make a company-related purchase. There’s nothing wrong with this in principle, but failing to track these transactions will result in higher taxes for the business as well as difficulty in receiving reimbursement.
If you don’t have experience with accounting and/or bookkeeping, there are a number of programs available to make this aspect of the job easier. However you choose to manage expenses, make sure to track them carefully in order to minimize your tax bill and pay your employees when necessary
Create a Bank Account for Your Business
Business and personal transactions generally need to be separated for tax purposes, and the easiest way to achieve this is by starting a separate account dedicated to the company. This makes it simple to go back and track income and expenses during tax season.
It’s common for banks to provide new businesses with special offers for opening accounts, so consider shopping around and comparing rates at a few different banks. It may seem more convenient to simply stick with your personal bank, but finding a more lucrative offer could result in significantly lower costs.
Structure Your Business to Minimize Taxes
Depending on your jurisdiction, you may have a range of options available to you when deciding how to structure your company. It may be worth contacting a professional accounting firm in order to receive the most accurate and helpful advice concerning potential tax burdens.
Creating your own business can be an incredibly rewarding and lucrative experience, but it’s important to be prepared for everything that could come up as you try to grow your company. Understanding these simple accounting tips and concepts will help you make the right decisions for your business.