Accounting Kickoff Checklist
Congratulations on taking the first step towards reaching financial success in your business. It is critical for businesses to have the right tools in place to track financial performance. Do not end the first quarter without deeply considering the main points that will be enumerated below:
- Forecast Your Income
Every business needs to have a snapshot of their expected income and spending. People have the tendency to over complicate a budget when it can be as simple as dividing your annual projected income by 12 to visualize your monthly targets. From the monthly targets, businesses can implement sales tactics and promotion to reach those goals. A forecast tells you where you want to go, including the milestones to reach on a monthly or weekly basis. Moreover, doing a ratio analysis of your income distribution will clearly tell you what you should mostly be focused on. Eneya Accounting assists businesses on setting up their monthly and yearly targets.
- Incorporate Your Business
From a legal standpoint, businesses should protect their personal assets to their business liabilities. Creating an entity for your business saves your personal assets from litigations and lawsuits. Depending on your business model and structure, one would structure his or her business as a limited liability corporation (LLC), a corporation, or partnership with the secretary of state where you want to incorporate the business. Here is the link to incorporate your business in California. You should consult your tax professional for clear guidance on what suits you the best.
- Opening a Business Bank Account
Whether you are a sole proprietor, corporation or partnership, businesses must maintain personal and business finances separately. Businesses can set up a checking account for operating activities and a savings account to store cash for payroll and tax liabilities. Another advantage of keeping business records separate from personal finances is the ease to create a profit and loss report from Excel or an accounting software.
- Storing Your Data
You should keep a record of your spending and income in order to know where you are going with your business. If you are just getting started, Excel is a great tool to record your transactions. Besides having records written in Excel, businesses should also create a folder on the local computer to store check images, invoices, bills and receipts for backup purposes. It becomes complex and difficult to keep track in Excel when you have multiple locations and vendors involved in your operating activities. This is why having an accounting database, like QuickBooks, will be more beneficial in assisting you in storing your data and running reports.
The future can be unpredictable, so having some type of insurance to protect your business is an investment to consider in the accounting checklist.
It can save businesses up to millions of dollars in potential liability in case of litigation or settlement.
Here are few examples:
- Error and omission (E&O) insurance for services dealing with data gathering and processing (accounting, finances)
- General liability insurance for property damage and injury claims
Eneya Accounting is here to assist you with forecasting your needs to kickoff the year strong with clear and explicit goals. Schedule your consultation through this link to get started with your new year goals.