self employment and taxes - what do you do?

Posted on: 3 September 2020

If you are in the process of starting up a business, you need to make sure that you spend just as much time setting up the financial side of your business as you do setting up and developing the idea behind your business. Taking care of the accounting side of your business is necessary if you want your business to thrive.

Accounting Startup Tip #1: Get Up to Date on the Law

With finances, there are lots of legal ramifications of the actions you take. You need to understand what information you need to track in order to accurately determine your expenses and revenue at the end of each year.

You need to know how long to save important documents. You need to make sure you understand payroll and are withholding the right amount of taxes from employee's checks.

Accounting Startup Tip #2: Create a Budget

As a startup, it can be tempting to spend money on anything that you think will help your business. However, you need to be careful with your cash flow, especially when you don't have a lot of data about how much money you will be able to bring in and what sales will look like.

You need to create a budget that you stick to each month. Your budget needs to make sure that your business operating expenses are taken care of before you spend money on anything new. You should establish a vetting process you go through before making any new major purchases in order to make sure you maintain your cash flow.

Accounting Startup Tip #3: Use Accounting Software

Long gone are the days where you had to keep your books by hand. Work with an accountant to find accounting software that will help take care of your business's needs. Specifically, look for cloud-hosted accounting software.

With cloud-hosted accounting software, you can access your accounting software from anywhere, and all of your data will be backed up both locally and on the cloud. With accounting software, you can link other financial information together, such as your bank account, making it easier to keep track of your money.

Accounting Startup Tip #4: Hire a Professional

You don't have to be an expert at everything, which is why if you don't have a background in accounting, you should hire a professional to assist your business. You don't need to hire an in-house accountant;

Instead, hire an accounting service where you just pay for the services that you need. An accounting service provides you with an affordable way to ensure that a professional is handling and checking all your financial records. They can provide you with valuable insight and feedback that you can't get elsewhere.

When you are starting a business, it is important to get up-to-date on the law surrounding your financial transactions. You need to budget, use accounting software and hire an accountant to help keep you on the right financial track.

To learn more, contact an accounting professional.