Creating an accounting system from scratch can be a daunting task. Starting off the right way is important, as accounting discrepancies can cause unexpected fines or fees during tax time or audits. New entrepreneurs should follow the basic guidelines when handling their business accounts.

1. Separate Business and Personal Accounts

Even if the company is small and the entrepreneur is not expecting to make a large profit during the first few years, it is a good idea to have separate bank accounts for business and personal needs. Mixing up personal and business finances can result in the close scrutiny of both types of accounts during an audit. If any receipts are lost or expenses are not carefully documented, the entrepreneur could be in trouble. Establish the company as a legal entity with a tax ID EIN number Tucker GA and track the expenses carefully to avoid problems.

2. Use the Right Software

It is entirely possible to keep records by hand using notebooks or create a few simple spreadsheets to log losses and profits. However, the right software program can allow entrepreneurs to quickly and efficiently enter information and obtain graphs, balance sheets and other relevant printouts without spending hours creating templates from scratch.

3. Create Financial Goals

New entrepreneurs may not know how to predict or measure financial success. Accurately making realistic financial predictions takes a lot of research and experience. While it may not be easy, it is important to set realistic goals for the first several years. Breaking down the goals into smaller chunks can help, as trying to reach quarterly or monthly goals can seem more attainable than meeting a benchmark for the year.

Running a company takes hard work and dedication. At times, dealing with all the aspects involved can feel overwhelming, but having a solid accounting system can help reduce stress.