Setting in place a solid accounting system for a new business is obviously important if you hope to turn a profit. But carefully considering an accounting strategy can also help you to make important business decisions that can affect the longevity of your business. As a new business, however, your accounting model is not going to be the same as how a larger, established company would approach their finances. While you do want to set up all of your necessary financial statements, there are also a number of other things you need to consider for your new business that are particularly important to getting set up and tracking the early phases.
- Open a bank account for the business. This initial step is necessary for accepting payments and paying your creditors. You should also set up a separate payroll account if you will have employees, but this is not always needed. Even if you are a very small business, your business bank accounts need to be separate from any personal accounts to keep your accounting records orderly.
- Make a list of your creditors. This will function as your liability accounts in your accounting system. List everyone to whom you owe money, including credit card companies, vendors, mortgage companies, banks and finance companies. Include the amounts owed to each creditor and the timeline established for repayment.
- Create an inventory of assets. List all items and materials that the company owns, including cash, office equipment, buildings, vehicles and office supplies, as well as the value for each item.
- Setup and track inventory. For companies with inventory, list all inventory items, including inventory parts, you have on hand and properly track the quantity and value of each item. This is also critical to help you monitor your current stock and develop proper purchasing procedures and controls.
- Choose your accounting system. A new business can choose from a variety of accounting systems. While handling your accounting on your own or through an online system, most small businesses will benefit greatly from hiring an accountant. An accountant can provide the personalized attention to your business to help ensure that your profits and losses are tracked appropriately, help tremendously at tax time, and help avoid any potential legal or financial headaches down the road.
The beginning phases of a new company are vitally important to ensure that the business succeeds in the long run. Back Office Support Solutions offers bookkeeping and accounting professionals, on an hourly fee basis, to assist you with all of the items mentioned above, and so much more. Find out how Back Office Support Service can help you get started on the right foot.