Icon Tax Group: Starting and Organizing Your Business

michael-lodge

by Michael Lodge

I found this great article in Seattle Business that really gives good advice on starting and organizing your business.  Even if you are in business and are not good at the organization part, maybe this article will help you.  I always tell my clients organize and document, that very process will save you in any audit or other issue that may come up.  We are in the last quarter of the year, you should be sitting down with your accountant or tax accountant and start being proactive, reviewing your financial statements, doing some end of year tax planning.  If you need help call our office at:  877.778.1770 and speak to a tax practitioner.

Shelter Your Personal Finances

Yes, you’re starting out small, but with any luck you will eventually grow. If your business is not incorporated, consider doing so or forming an LLC to shelter you from some of the financial risks you may face and to protect your business liabilities from spilling over to your personal finances.

Separate Business and Personal Finances

It is particularly easy to mix the two when you are running a small business. If you have not already done so, set up a checking and savings account to be used only for business purposes. Make sure to have a clear way to keep track of your business expenditures, like using only a debit card tied to your business account. Put approximately of 25 percent of each payment for goods or services you receive into the business savings account. You will need this money to pay taxes at the end of the year.

Track Your Finances Like the Big Guys

Finance software is a must for medium and large-sized businesses. The days of keeping receipts in shoe boxes and filing each transaction away separately are far behind them. No matter how early you are in the process of building your business, do yourself the favor of investing in finance software. A program like EasyStart from Intuit is built specifically for the small business owner and allows you to neatly organize expenditures, income earned, and any other financial matters right on your computer.

Organize Hard Copies

You will still need a place to keep paperwork and receipts that accumulate throughout the year, says Dummies.com. Like any other organizational project, it is easiest if you create a system. Make a separate file for everything you will need, so that you can quickly find whatever you’re looking for. If possible, purchase a file cabinet and create files for each distinct part of your business. You will need files for:

  • Accounting and bookkeeping records.
  • Bank records.
  • Contracts, including leases and purchase agreements.
  • Intellectual property, such as trademark applications and patents.
  • Marketing material, like brochures and coupons.
  • Permits and licenses.
  • Standard forms, such as purchase orders and employment applications.
  • Correspondence.
  • Employee records.

Set 15 Minutes Aside

You should take 15 minutes each week to organize your business finances. This short update will give you a clear view of where you are, how your finances are fairing, and if you need to make changes to move things in the right direction.

Written by:  MELISSA KINCAID, Seattle Business