Accounting Basics for New Entrepreneurs: Setting Your Business Up for Success
February 16, 2025
Understanding the Basics of Business Accounting
When you’re starting your business, accounting might seem daunting, but it’s a skill every entrepreneur must master. Accounting isn’t just about tracking numbers—it’s about understanding your business’s financial health, making informed decisions, and staying compliant with tax regulations. Think of it as the language of business.
Solutions For Small & Large Business
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Start With a Business Bank Account
Keeping personal and business finances separate is essential. It simplifies bookkeeping and ensures you stay organized during tax season.
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Learn Basic Accounting Terms
- Assets: What your business owns (cash, inventory, equipment).
- Liabilities: What your business owes (loans, credit card debt).
- Revenue: Money coming into your business.
- Expenses: Costs of running the business.
- Profit: What’s left after deducting expenses from revenue.
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Choose the Right Accounting Method
- Cash Basis: Record income and expenses when cash changes hands.
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Accrual Basis: Record income and expenses when they’re earned or incurred.
Many small businesses start with cash basis, but consult with an expert to see what works best for your needs.
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Leverage Accounting Software
Tools like QuickBooks, Wave, or Xero are designed to make tracking income, expenses, and invoices easier.
Beneficial Strategies
Accounting doesn’t have to be overwhelming. Incorporate these strategies to build a solid financial foundation:
✅ Track Every Expense: Record every business purchase, no matter how small. Use apps to scan and store receipts digitally.
✅ Monitor Cash Flow Regularly: Keep an eye on the money coming in and going out to ensure your business stays afloat.
✅ Plan for Taxes: Set aside 25-30% of your income for taxes and keep organized records for deductions.
✅ Create a Budget: Outline expected revenue and expenses for the month or quarter to stay on track financially.
✅ Consult a Professional: Hiring a CPA or bookkeeper can save you time and help you avoid costly mistakes.
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Have Any Question?
If you have any questions or need further assistance, feel free to reach out to us at Valor Accounting LLC.
- (513) 400-4498
- Tejay@valoraccountingllc.com