Are finances preventing your business from achieving success?

Business owners have a tonne of financial responsibilities. From tracking expenses to reviewing tax obligations, reconciling accounts, and projecting growth, the volume of tasks never ends and can quickly become overwhelming.

To prevent financial issues from impacting you, we’ve compiled our top tips that will set up entrepreneurs for success.

1. Separate Personal from Business

The first step that every entrepreneur needs to take is to open a dedicated business bank account. Doing this early on prevents confusion and makes tax preparation and tracking easier.

Without a dedicated business account, owners are susceptible to accounting mistakes like mislabelling transactions as personal. An error like this not only causes owners to have an incorrect picture of their financial health, but taxes could be incorrectly filed.

If a misfiling occurs, business owners should expect hefty fines or back taxes owed to the IRS. Further resulting in a flag on the account and a potential audit.

2. Set Up Reliable Bookkeeping

Every owner needs to determine a process that saves, files, and tracks transactions. This can be done with an automated software system like QuickBooks or with the help of a dedicated accountant who can organize it on your behalf. Regardless of how it is done, owners need to make clear and common rules about how they will save and file each transaction.

Once a day-to-day system is in place, owners should then set regular reminders to audit their records for accuracy.

3. Decide on a Business Structure

The way a business is structured will directly impact its finances and accounting needs. For example, it impacts things like how a company is taxed, the forms that need to be submitted, and how to stay compliant.

Given the impact a structure has, owners should familiarize themselves with the various kinds (such as sole proprietorship, partnerships, corporations, LLCs, etc.) to see what would work best for them.

4. Understand Tax Responsibilities

There are a number of tax obligations to be aware of before starting a business. Many owners fail to familiarize themselves with tax laws and end up with bills or penalties they did not know they had to pay.

Some potential taxes that owners need to be prepared for include income tax, self-employment tax, sales tax, and payroll tax.

5. Work with a CPA Early

It is never too early to get help from a trained financial professional. Someone like a CPA will be able to assess a business plan, its current circumstances, and goals to guide it through its setup.

Professionals will also ensure compliance standards are met and that all tax obligations are outlined.

If you’re a new entrepreneur in Orlando, get in touch with one of our professionals at A.P. Accounting & Tax Services to help your business start out strong.

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