By the Books
Bookkeeping may not be your cup of tea, but it's a necessary part of any business. "Businesses can't continue if they don't have a good picture of how they have succeeded," says Kathy Cunha, a services supervisor at FlexTime Financial, a unit of Salem, Oregon-based CPA and consulting firm Aldrich Kilbride & Tatone. These bookkeeping basics will keep your business on track financially.
Separate business from pleasure. Don't mix business and personal expenses. Cunha advises opening a separate business bank account, using a different credit card and keeping business receipts separate.
Don't procrastinate. Regularly reconcile all bank accounts, accounts receivable and accounts payable. Failing to reconcile accounts or record transactions as they occur can only hurt the business later.
Keep the cash flowing. Cunha recommends starting with enough money in the bank to cover your first nine months of business. She says, "If you're worried about paying every last bill, you're not going to be able to focus on the venture."
Don't pretend to know it all. Even if you're handling the daily bookkeeping by yourself, have an accountant on hand to answer the tougher questions regarding deductions, wages and taxes.
If learning the bookkeeping ropes seems like a daunting task, take a course online or at your local college. Several accounting software packages also make the task a whole lot easier. Cunha suggests QuickBooks, Peachtree or Microsoft Small Business Accounting for startups with basic accounting needs. Entrepreneurs who need to track inventory and work with contractors may find Timberline and American Contractor more helpful.