At the bare minimum, we always recommend a minimum of a checking and savings account. These must be in the business’ name, not yours. For most businesses, the Profit First model is a great way to get started on the right foot. Simply put, you’ll have five checking accounts – I know it seems like a lot, but you won’t deal with all five every day.
- Bookkeeping Software
Time to get in it and pick a platform for your bookkeeping. Most businesses use QuickBooks Online, but there are many to choose from, including Xero, Freshbooks, Oracle, Peachtree, etc. Each has its pros and cons, features, bells, and whistles. Most come in tiers, so pick the level that is the right size for your business now. You can change it later without any fuss.
Once you get into your bookkeeping platform, the first thing you’ll need to do (aside from entering all your business information) is set up your Chart of Accounts. This keeps your business finances organized and generates financial reports.
- Budget Building
If you thought you’d have a business without a budget, well, you may as well throw in the towel right now. This is absolute: without a budget, your business will not be successful. Tracking expenses, forecasting income, and knowing how much to save is the bare minimum. Also, this needs to be dynamic – as in you are reviewing and updating it monthly.
- Best Practices
This is the meat and bones of bookkeeping – the daily grind. You’ll need to know your daily/weekly bookkeeping tasks and your monthly/quarterly/annual tasks. List them out, put them in a calendar, spreadsheet, pillow embroidery – whatever works!
Then you have to do them! Daily cashouts, deposits, and transaction processing. Weekly deposits, payroll, and invoicing. Monthly budget, goals, cost analysis, reconciliations, and reporting. Quarterly reporting, goals, and taxes. Annual reporting, goals, and taxes. Just to name a few.
- Bookkeeper & Accountant
Every business needs both!
I’ll say it again as it bears repeating: every business needs an accountant AND a bookkeeper. Some firms do both, and firms that do one or the other – that part doesn’t matter as much.
An accountant is your business strategist. They look at the tax side and figure out your business strategy from that vantage. From day one to whatever exit strategy you’ve elected – they can help you figure that out as well. Their focus is the big picture, your business as a whole tax-paying, compliant entity.
Bookkeepers are in the trenches with you. They will be monitoring your expenses, tracking your spending, projecting your income and so much more with one goal in mind: your business goals. They help you budget, bookkeep and be accountable (pun intended) for those best practices.
Accountants help you draw the map, while bookkeepers guide you and keep you on the path.