If you've officially launched your small business after putting in the long hours of planning, raising capital, and filing the paperwork to become a state-registered entity, you have come a long way. The next step is establishing a solid foundation with diligent accounting practices. Here are a few tips for ensuring your cash flow and expenses are accurately tracked. 

What Small Business Accounting Practices Will Benefit New Entrepreneurs?

1. Open a Business Account

You'll want to keep your company's finances separate from your personal ones. Open a business account at a bank or credit union in your firm's name. This is one of the best ways to stay on top of all related debit and credit card transactions. When it's time to file your business tax returns, it will be much easier to track business financial activities that may need to be included on your IRS forms. 

2. Hold on to All Receipts

Get in the habit of keeping all your small business receipts—no matter how tiny the transaction. These records contain vital information such as dates, what was purchased, and the amount, which can be helpful for tax deduction qualifications. Consider organizing them by either date, type of transaction, or a combination of both. Besides holding on to the originals, scan the receipts as PDF files or take screenshots with your phone as backups. 

3. Record Income

From vendor payments and cash to revenue earnings, it's also important to keep accurate accounting records of all income. Knowing how much cash flow is coming into your small business will provide a more reliable picture of how your operation is faring financially. Diligent income recording is also important for ensuring overspending and tax underpayments are not occurring. 

4. Collect Taxes at POS

You should always add the sales tax to transactions at the point of sale (POS). Doing so will help minimize paying a large tax sum when filing your business tax return. Penalties may also be assessed for making delayed tax payments. Establishing POS tax practices can help keep you in compliance and provides a stronger safeguard against accounting miscalculations.

If you've recently launched a small business, rely on Demshar Eaton CPA as your trusted partner in maintaining accurate records so that your company remains viable for the long term. Based in Ashtabula, OH, the licensed agency has served Conneaut, Geneva, and the surrounding area since 1978 by providing customized, personalized, and affordable accounting services. The team of CPAs works with firms of all sizes and from a range of industries. To learn more about how they can help your business thrive, call (440) 992-6622 for a complimentary consultation. Visit the website for the complete lineup of available services.