Small Business Accounting From Day One

I’m Going To Start A Small Business!

You have a gift. Or a calling. Or a really cool idea. Now you want to start a business. 

Starting your own business is a great idea. It’s also a scary idea, and an invitation to working a whole lot of hours and not getting a lot of money right away. One of the most critical things you can do when starting a small business is getting your accounting/banking/financial practices lined up right from the start. 

That’s where Shaw & Associates comes in—you’re an entrepreneur, not necessarily someone who loves working with numbers.

Everyone’s Doing It!

Some quick statistics from the Government of Canada on small businesses as of December, 2017:

• 97.9% of all employer business were small businesses.
  
• 69.7% (8.3 million people) were employed by small businesses.
  
• 73.4% of Canadian businesses were small businesses (1-9 employees)
  

In other words, you are in very good company if you are planning to start your own small business—everyone’s doing it!

Bookkeeping Steps When Opening a Business

Inspired by this Small Business Start-up Accounting article from Shopify, here are some bookkeeping steps to take when you are opening your business:

Open a bank account.

Sole proprietorships don’t require a separate bank account, but it is a good idea. Corporations do require one.

Determine how you’ll get paid.

Cash, cheque, money order, Electronic Funds Transfer (EFT), credit card? All of the above? The best strategy is to create as many possible ways for clients to pay you as possible, so there are no barriers to this critical part of the process.

Develop a bookkeeping system.

Start as you plan to keep on going—keep track of day-to-day expenses and income as they happen, rather than dealing with all of it at year end when taxes are due.

Track your expenses.

You will need this for filing your business taxes, and also to keep on top of how your business is doing/where your money is going.

Determine your tax obligations.

Self-employed people who own a sole proprietorship will pay their business taxes through their personal income tax. Corporations have a more complicated taxation scheme. Again, talking with an accounting firm like Shaw & Associates can make this as painless as possible.

Do Monthly Check-ups

How is the business doing? What’s making money? What isn’t working? Are there things you need to do more of/do less of/hire other people to do? Small businesses need monthly check-ups to stay healthy.

For some more ideas on the subject of starting your own business, have a look at this video.

Shaw & Associates can help you from Day One with your small business plans. You might not have done this before, but we have—we can guide you every step of the way, to get you started right, and keep you on the path to success.

Contact Shaw & Associates Chartered Accountants for accounting help you can count on. One complimentary meeting with us will put you and your business on a more profitable and positive path.