If you’ve recently started a business, it can be overwhelming to think about tax time, and you might find it tempting to put off learning the dos and don’ts. But rather than being stuck with a pile of jumbled paper and not knowing what to do when it’s that time of the year, start to learn the accounting basics now.
Backup Everything
While you have great intentions to keep an email that has a record of a transaction or that invoice you sent a few months ago, it’s easy to get lost in a shuffle of digital documents. To ensure nothing gets lost, backup everything important to your business activities this year.
There are plenty of free options in the Cloud, so a small budget isn’t an excuse not to do it. If you feel overwhelmed by the task, put in 10 minutes at the end of the workday to backup a few documents and you’ll be on top of it by the time tax time is here.
Accounting Software
If you can’t figure out expenses or banking, these packages cover the accounting essentials, so you don’t have to stress that you’re missing anything. The reassurance of having a professional in your corner can be great for peace of mind.
As you start to use the software, you’ll become more familiar with how the processes work, and will get faster at using it. In time, you’ll find all of your practices are organized.
Stay Current with Bills
There’s no doubt that there will be bills, whether it’s online license fees or physical items you need to run daily operations. But it’s easy to lose track of what’s due when if you don’t get reminders (and even sometimes with those reminders, it’s easy to forget them).
Unfortunately, if you don’t pay the electricity bill, then you will lose out on working hours and ultimately fall behind in some way in operations. So figure out a system that works for you for recording bills regularly and stick with it.
Have a Contact Point
As you’re just starting in biz, it’s normal to be nervous about whether you’re filing things right tax-wise and if all the bases are covered when it comes to accounting. So try to form a relationship with someone well-versed in similar work as you who can advise you on how and what to do.
Choose someone you trust as you may have to discuss money, which is a sensitive topic. Also, ensure you are confident that this individual is someone who is doing everything correctly as a good financial role model.
Separate Your Expenses
What is meant here is explicitly to separate personal and business expenses. It’s integral to do so as it’s easy to blend the two, and then you’ll wind up with more paper and disorganization than you can imagine!
The other risk of not separating them is that you’ll use personal funds for a project rather than biz-related monies. If you do end up doing so, then make sure you clearly document it.
