Top Tips for Business Owners
April is Financial Literacy Month, and we want to take the opportunity this month to share our top business/financial tips. Over the next few weeks, we will share more in-depth resources on these Top 10 Tips for Business Owners:
Hire a CPA. - We recommend that business owners hire a CPA as soon as they decide to form a business. Wondering what the difference is between a CPA and a bookkeeper? Stay tuned for an entire blog post outlining the differences.
Develop Standard Operating Procedures. - These will change as your business grows and evolves, but it is important to start them in the beginning. Have a plan for invoicing, tracking vendor orders, handling inquiries, preparing proposals, etc.
Do not use Peer to Peer apps. - Venmo, PayPal, and CashApp are great apps for personal transactions, but they have no place in your business. They overcomplicate your bookkeeping as well as pierce the corporate veil, putting your personal assets at risk.
Do not intermingle business expenses in your personal accounts. Do not intermingle your personal expenses in your business accounts. - This overcomplicates your bookkeeping and pierces the corporate veil, putting your personal assets at risk. Simply pay yourself. Transfer funds from your business account to your personal account, and then use funds exactly as you wish!
Stay in compliance - It is your responsibility to know your state sales tax laws before you start selling products. If you decide to take on a project in a state other than your home state, you need to know the sales tax nexus laws and implications before you send the proposal. We will have more information on this topic later in the month.
Collect W-9s - Collect a completed W-9 from your subcontractors before you remit payment. The IRS requires businesses to obtain the taxpayer identification number (TIN) for any vendor that may require the issuance of a Form-1099. We have more information about 1099s and W9s posted here: https://www.businessbythebook.money/bbtb-blog/2021/12/16/1099s-this-should-help.
Keep your bookkeeping current and don’t wait until the last minute - As a business owner, bookkeeping is often the last task on your mind. On April 20, we will discuss what you do when you have fallen behind on your bookkeeping.
Learn how to read and understand your financial reports - Understanding how to read your financial reports and make educated decisions backed by data is imperative in order to grow your business in a smart and strategic manner. Join us on our webinar on April 27, 2023, where we discuss just that! Sign up here: https://my.demio.com/ref/IKHeyYmLe4pG2bRa.
Have strategies for managing cash flow - How many bank accounts do you need? How do I save for taxes? How do I manage my retainers when I don’t pay my vendors for 6 months? Stay tuned, we will have more information on that April 13.
Hire a Bookkeeper - That’s us! We recommend that you find a bookkeeper who specializes in your industry. Later this month, we will discuss the difference between a CPA and Bookkeeper and why you need both!
