Small business accounting

iVillage Member
Registered: 03-27-2003
Small business accounting
1
Mon, 05-29-2006 - 7:55am

Good morning and happy Memorial Day!

I'm just starting a home-based business and have been busy with the requisite legal and tax paperwork as well as setting up my home office. The administrative end of the job is fairly simple, but I've yet to find anything that addresses accounting/bookkeeping issues. I know to keep my personal and business finances separate, but beyond that, what specific records do I need to keep? Should I invest in a small business accounting program like Quickbooks, or will a spreadsheet suffice?

Thanks,

Soni

iVillage Member
Registered: 07-16-2003
Wed, 05-31-2006 - 10:09am

You should keep all receipts, bank statements, tax statements, etc for at least 7 yrs. If you are filing as a Limited Liability Company, S Corporation or are starting a bank account in a business name, you will want to contact the IRS to obtain an Employer Identification Number. You can go to the IRS Website & apply for one online. Don't forget to check your local governments for required licenses and tax requirements as well. Your local small business start up group should be able to help you with this. Another source would be your state's secretary of state website.

You could possibly keep track of your expenses and income on a spreadsheet or even just in a checking book. You could contact a CPA and have them prepare your financial statements and do your bookkeeping for you each month but that will cost you roughly $55- $100 or more per hour. If you start your business and it becomes successful and has a lot of transactions, you may wish to purchase either Peachtree or Quickbooks accounting software. A CPA could also help you get started with these programs and teach you how to do the daily entering of receipts and expenses.

Good Luck - a CPA