If you are thinking about starting your own online store, you need to consider the business accounting aspect of it. With the right business accounting tips, your business will take off in no time. The following tips will help you to cover your bases when it comes to financing and small business accounting.
If you’d rather not manage your finances on your own, you should educate yourself about what a Certified Public Accountant does, and consider if this type of professional can help your particular business.
Open a Bank Account
Once you register your business, you will need an account to stash your income. Opening a separate account for your business is the best way to make life easier during tax season. Although a sole proprietorship does not need to have a separate bank account, it is recommended.
You need to open a checking account for your business as well as savings accounts that will allow you to plan for taxes and organize your funds. Before you approach any bank, you should do your research then shop around for different accounts as you compare varying fee structures. You must have a business name before you can open a bank account for your business.
Track Your Expenses
You need to learn how to track and categorize your business expenses if you want your startup to succeed. This important step allows you to build financial statements, monitor your financial growth, and prepare tax returns. From the very start, you should have a system for organizing your receipts as well as other records.
Develop a System for Bookkeeping
Bookkeeping is the process of writing down your daily transactions, putting them into categories, and reconciling some bank statements.
As a startup owner, you need to figure out the best bookkeeping methods to use, including:
- Outsourcing – you can hire a part-time bookkeeper to record your transactions for you until you can do it yourself. However, this can be a bit expensive for a new business.
- Use software – if you want to save money, you should use bookkeeping software such as Wave. You can also use an Excel spreadsheet if you want.
- Hire an in-house bookkeeper – once your business takes off and you start to generate an income, you should consider hiring a full-time bookkeeper to deal with the books.
With this many options out there, you should be able to choose the right one for your needs.
Just make sure that you avoid spending money when you cannot afford it. If you need to borrow some money during the first months, you should look at some frequently asked questions to see what others are doing.
Set up Payroll
If you plan to hire a few part-time or full-time employees, you need to set up a payroll system. However, if you are going to be hiring independent contractors, you should keep a record of the amount you are paying each person. This will come in handy for bookkeeping purposes.
Investigate Import Tax
Depending on the type of business model that you have set up, you might need to import goods to sell in your store, which means that you will have to pay duties and taxes. You need to take some time to understand the import of goods and the amount you will have to pay for different items.
Figure out How Much You Will Earn
Before you start selling, you need to figure out how to accept payments. If you open a Shopify account, you will not need to go through a 3rd party payment gateway. With an online store, you can accept credit card payments from customers and process them before shipping the items.
Starting a business can be overwhelming but the above tips will help you to keep your finances in order. These tasks will contribute to the success of your startup and help it grow.