There are so many different tips on the basics of book keeping for new business owners, it is hard to figure out what is good, what is bad, and what is not worth your time looking. Let me help, these are our top three basic book keeping tips, and they are all important for different reasons.
- Keep Your Business and your Personal Separate
If you have not done this already, then you need to set up a separate checking and savings accounts specifically for your business. Many new business owners do not realize how important this really is, and how much of a difference it is going to make.
If you are doing your own book keeping, as your interest in this suggests, you probably think that the entire idea of keeping your personal records separate from your business records is just going to give you one big headache. But trust me, it is going to save you time, when you go to gather all of your information at the end of the year for tax purposes, having everything separate right from the start will make the entire process run smoother.
Signing up for online banking, as well as getting a paper statement every month, can save you time. It is very safe to check and bank online, and you can do things like pay bills and look over statements with a few clicks. While you should always have paper information, too, going online makes the processes of banking more efficient
As a personal recommendation, having your personal accounts in a completely different bank then your business accounts can be easier. You always know what statement you are looking at, and you do not have to worry about confusing things. While this is obviously your choice, it can make things easier.
- Find a Good Software
Do your really want to spend all the time it takes to manually write out your bookkeeping? Most people do not using a computer software program specifically for bookkeeping can make your life a lot easier.
There are a lot of great programs out there, but for your business, there are a few that I can tell you from personal experience that will not help MS Money being one of them. While it is a great program for personal finances, it does not do well with handling a business.
One mistake some businesses make is going with Quicken, which is oversimplified. While it is an alright program if you are doing your personal finances, or if you are keeping things small, as you grow, it will not be a good program to grow with you.
- EIN is your Friend
Getting a federal tax identification number, or an Employer Identification number, is a great safety precaution, and something most small businesses do not think about. It does not matter if you have an employee, or plan on hiring one anytime soon.
If you do not have one, you have to use your personal SSN for all of your business matters, and having that number just laying around is not a good thing at all. An EIN number protects you and your family.
Applying is easy. The fastest way is to go online and apply through the IRS. It is easy, will not take you very much time, and can save you a fortune.