I work with businesses at all levels, from those who have been in business for a while to those that haven’t quite yet begun. And for the latter group, the beginning always starts with the same question about managing accounting: Where do I start?
Well, you can start with these three steps:
OPEN A BUSINESS BANK ACCOUNT. My first piece of guidance to new business owners is to TRACK EVERYTHING. Every income or expense transaction as related to the company should be identified and categorized, but the easiest way to do so is by having an account that doesn’t include personal expenses mixed in (no more going line by line to determine what is business and what isn’t).
SIGN UP FOR AN ACCOUNTING SYSTEM. We highly recommend QuickBooks, but you can use whatever system feels intuitive for you. Many offer a free trial to start, so create an account and try different actions out to see how hard it is to perform steps that you will need initially or most often. How hard is it to create an invoice or record payment? Where do you enter client info and is it easily accessible? Make sure that you feel comfortable with the system you sign up for, since this how your input will be used to create your financial reports.
DETERMINE HOW YOU WANT TO GET PAID. Still sending PDF invoices? Use the accounting system that you set up in Step 2 to send and track them electronically instead. Ready to accept payment? Decide whether it’s worthwhile to set up a payment processor to take check and/or credit card payments, or whether you want to use a service like Paypal or Square to take payments online and in-person. Make sure that whichever method chosen is tied to your business email and business account to make for a more seamless way to identify transactions and categorize appropriately when the money starts rolling in.
You wanted to get started. These are the three steps to get things underway. You can listen to more ways to get your accounting systems in order by listening to the Fish Food podcast, bite-sized advice to help you in as little as 15 minutes per episode.