Our resident money management maestro offers some pointers.
After last week’s issue, I got tons of questions from people asking about bank accounts, tax ID numbers, VAT, and all sorts of other accounting-related stuff.
But seeing as how I’m not really qualified to offer any real advice, I asked Matt to come back and write a guest issue. This will be the first “Tips from an Expert” half-issue, but it won’t be the last! -meg
Hello,
I’m Matt from Mailchimp’s accounting crew. I’ve been at Mailchimp for almost 4 years. Before that, I spent 6 years at a public accounting firm. From my experience working with small businesses, I know that a focus on generating revenue can sometimes come at the expense of a strategy for managing and tracking all of that business-related money. I’ve learned a lot along the way, but there are a few tips that stick out as being particularly important for any startup or small business.
1. Always separate personal and business monies.
Whether you plan to record business income and expenses on your personal return or separately under its own entity, maintaining a clear distinction between personal and business money will make tax time much less frustrating.
2. Keep everything.
Some businesses develop complex organization systems. Others just prefer to put all their receipts in a folder. No matter which category you fall into, make sure that you’re saving everything that pertains to your business.
3. Then, record everything.
Use accounting software (QuickBooks, for example) to help you keep track of all the receipts, invoices, and other documentation your business accrues throughout the year. Trust me, your accountant will thank you.
4. Prepare and review your budget at least once a month.
Creating a budget for your business can help you predict — and plan for — the future. By tracking historical costs and projecting what your costs will be in the weeks, months, or years ahead, you’ll get a good idea of your current growth rate and the amount of future growth you need to be sustainable.
5. Visit the U.S. Small Business Administration’s website .
It’s full of valuable information, including a bunch of helpful articles about starting and managing your business.
If you run a small business, it’s important to maintain good accounting records so nothing comes back to bite you when it’s time for taxes or investment funding. If you don’t have plans to hire a full-time accountant, consider utilizing a consultant or a part-time bookkeeper. They can help provide you with the accounting support you need, so you can focus on the day-to-day of running your business. That’s what got you here in the first place, right?