Even before you open the door and flip the “OPEN” sign, there are many steps you must take to be sure your accounting is accurate and complete. Your business may be small enough so you don’t need to incorporate. If you wish to incorporate, fill out the forms and complete this process before you begin. If you are not going to keep your own books, do your research well and choose a firm at the very outset. If you are confident you can do it yourself, the following steps are vital:

1. Purchase a Dependable Computer

The computer needs a full set of software, such as Windows Microsoft Office Professional. This will give you the tools to write your business letters and you may be able to publish your own flyers. Keep all your receipts.

2. Purchase an Accounting Software Program

Research and purchase a software program that will make your bookkeeping much simpler once you are familiar with it. One such program is QuickBooks. Using their pre-installed chart of accounts, you can adapt them to your own use.

3. Design Your Chart of Accounts

Think through carefully this step. Remember that you can always add or adjust this chart in the beginning, but it becomes more complex once you file your first tax forms. You can make this step benefit you substantially if you tag each item with the line on which it will appear on your tax form. Preparing your taxes will then become easier.

4. Research the Best Accounting Period to Use

Use online help to determine the best accounting period to use. One such web site is offered by the U.S. government. It is www.irs.gov and the form is Publication 538 Accounting Periods and Methods.

5. Set Up Your Files

Yes, this is vital to do right at the start. Very few people do filing willingly or take joy in it. Once you begin to operate your business, keep your filing up to date.

6. Inventory

If your business is reselling articles, you will need to keep accurate records about your inventory - starting with the first shipment. 

Once Your Business Is Up and Running

• Keep all receipts.
• File all papers. Once you have entered the records for that day, file the information in your file.
• Accuracy is important. Be very careful when you enter the information.
• Learn early to do monthly reports to keep track of how your business is doing. Include in these monthly reports a Balance Sheet, a Profit and Loss Statement and a Cash Flow Statement.
• Taxes are vital. Have a professional do them, but examine the information to be sure it is accurate and correct before signing.

Incorporating good business practices will be a vital step to the success of your business. Don’t hesitate to consult a professional, research the government web site for rules and regulations and consider continuing education. Rules and regulations may change over time. Keeping current with changes is important.

Sarah writes on behalf of a number of successful businesses in the South West including Drummond LLP bookkeeper Plymouth, Drummond LLP strive to deliver excellence and their service extends to the South West region. If you need a bookkeeper in Devon or Cornwall – Trust Drummond LLP to take care of all of your accountancy needs.