Small Business Accounting 

What is Business Accounting? 

accounting-1Business accounting involves identifying, recording, and communicating the economic events of a company. Financial accounting records all transactions and summarizes the amounts financial statements at the end of each month and year.

Why is it important? 

Financial records describe what a company owns and what it is owed. Precise records should be kept for all financial activity of a company in order to make sound business decisions. Additionally, you need to keep your business finances separate from your personal finances in order to avoid losing the limited liability protection that an LLC affords you.

 Where do I start? 

The first thing you will need to do is open a business bank account. Once you’ve done this, you’ll be able to use your bank card or business checks to pay for expenses. You may also benefit from applying for a business credit card that offers cash back on purchases, extended warranties, and easy account management. Learn more about business credit cards here.

Managing your small business accounting 

While your LLC is still young, you may be able to organize your finances in an Excel spreadsheet. But as your business grows, you may want to seek external resources to avoid unnecessary complexity. When an Excel spreadsheet is no longer sufficient to keep you organized, you can consider utilizing accounting software or hiring an accountant. Accounting software will simplify the “do-it-yourself” accounting process, while an accountant will completely take the work off of your hands. Both platforms will help immensely with payroll, taxes, and financial tracking. Depending on the type of business you’re operating, you may need a receipt and/or sales booklet to keep track of sales. If your business does mainly online transactions, you may want to open a business account with PayPal, Amazon, or Google, so that you can accept payment and track your transactions online.