Launching a new business takes hard work and perseverance, but with the proper guidance, a solid accounting system keeps your staff from running around the balance sheet. Ownership of multiple businesses can overwhelm a CEO with forms and regulations, so it’s important to consult with an outsourced accounting and bookkeeping service to ensure accounting tasks are on track with your new business startup.
Business Accounts and Fee Structures
After registering a business name with the state, a separate bank account for an LLC, partnership or corporation needs to be created for each individual business. Consult with your accounting service to find a suitable bank account for your business’s needs. Compare fee structures to find the account that fits the number of business transactions you’re expecting. Commingling credit cards for multiple businesses is discouraged, so apply for separate credit cards for each business--and of course remember to keep your personal expenses separate as well!
While we're on the topic of keeping expenses separated, the key to having solid record keeping is by developing the most effective system for expense tracking. The IRS requires you to hold onto tax records for four years after the tax is due or has been paid, so it’s important to keep excellent records in the event of an audit. Providing expense information to those providing your bookkeeping services is easiest when done through expense tracking software. This eliminates the hassle of having your bookkeeper deal with individual slips of paper, though this information still needs to be securely stored. Get integrated application recommendations from your outsourced accounting service to ensure software compatibility with accounting files--we are particularly fond of Tallie and Nexonia these days.
The CEO needs to decide who will handle the recording of day-to-day transactions and reconciling bank statements, and whether an outsourced accounting service will be hired to provide detailed financial statements. A decision will need to be made as to who will tackle simple bookkeeping requirements, including payroll, or whether both bookkeeping and accounting services will be outsourced. Another major decision a business needs to make is whether it will use a cash or accrual accounting method. Businesses that hold inventory and have sales of more than $1 million per year are required to use the accrual method, as are non-inventory based businesses earning more than $5 million per year. Consult your CPA or tax advisor to make sure you are using the appropriate method for your business requirements.
Tax Collection Obligations
Tax regulations are constantly changing and evolving, particularly regarding rules with foreign countries. An outsourced accounting service can assist you in establishing sales tax procedures in order to maintain compliance when trading with foreign countries. Your accountant can provide advice on each state’s regulations regarding international sales taxes and can tell you how often you need to remit taxes, depending on total amount owed.
Need assistance getting your new business on the right accounting foot? Let us know how we can help!