Launching your own business can be thrilling, but also overwhelming. There are many things to take care of when you’re an entrepreneur, from promoting your brand and hiring your team to accounting. Like many other aspects of doing business, accounting can seem daunting, so we created this guide with 10 key accounting tips for new business owners so you can start out right and set yourself up for success.
1. Create a business bank account
You might be tempted to use your personal bank account when starting out, but mixing your personal and business finances is one of the most common mistakes a new business owner may make and can become a huge headache in the future.
Open a separate business bank account as soon as you decide to start your own business, even if you’re operating as a sole trader. This not only separates your accounts, but also helps you track easily how much money you’re making and spending on your business. This way, you can monitor your cash flow, budget, and plan for the future. Also, it makes tax time easier – you won’t have to spend hours on finding your business transactions in your bank statements.
2. Use an accounting software
Accounting softwares, such as Xero, can help you automate and simplify your accounting and bookkeeping tasks. For example, you can use it to record and categorise your transactions, generate invoices and receipts, reconcile your bank statements, create reports and dashboards, calculate taxes, and so much more.
You don’t have to be the most tech-savvy business owner out there, most accounting software platforms are designed to be simple and intuitive so you can spend more time on running and growing your business.
3. Create a chart of accounts