Starting a business is exciting\u2014and a little stressful too, especially when it comes to figuring out how to keep track of your business income and expenses. You don\u2019t necessarily need to hire an accountant right away, but there are some basic essentials you should know about managing your finances.<\/p>\n
Step one is to create separate accounts as soon as possible. Running your business through your personal checking account, credit cards, and payment processors like PayPal or Venmo can get convoluted fast, and may open you up to personal liability. It\u2019s worth the few minutes it takes to set up a business account for your payment apps.<\/p>\n
For banking, you could open a separate account with your existing bank, find a different physical bank in your city, or set up a virtual bank account like Found, Novo, First Internet Bank, or numerous others.<\/p>\n
Once you register your business with your state, you\u2019ll likely start getting mail with bonus offers, enticing you to sign up with a certain bank for a business checking account or a business credit card. These perks can be nice, but if it gets overwhelming, it\u2019s okay to just make a decision and stick with it.<\/p>\n
Obviously as you start your business, you\u2019ll be getting paid. Yay! Keep track of your income, including any invoices you send to customers.<\/p>\n
If you run your payments through a third party app like Stripe or PayPal, they will also keep records you can access to reconcile your own books, but it\u2019s better to use these as a backup than as your primary method of recordkeeping. Easier said than done, especially for those of us with ADHD, but we\u2019re talking about an ideal scenario.<\/p>\n
You also need to keep receipts for all business expenses<\/strong>. Most of your expenses will be deductible on your taxes, but in case of an audit you will need to prove that the deductible expenses were actually qualified. Thus, keep the receipts!<\/p>\n (Whoops! Already know you\u2019ve misplaced some of those receipts? Try looking up the word \u201creceipt\u201d or \u201corder confirmation\u201d in your email account, or contacting the vendors you purchased from to see if they can reissue your receipts).<\/p>\n