Regardless of how big your office may be, or whether you employ anyone, for tax purposes, you’re still considered a business owner. As such, you’ll need to keep careful records of both your income and your expenses. In addition to saving money when tax season rolls around, keeping clear and concise records of all your business transactions will give you a clear overview of which business activities are paying off and where you might be able to cut costs in order to improve your earnings. Of course, you could hire an accountant to manage this for you, but even so, it’s important to have at least a basic understanding of accounting and bookkeeping best practices. So if you’re a brand new small business owner, here are a few quick tips for getting off to a strong start. 1. Keep your personal finances separate It is imperative that you keep your personal and business transactions separate. You will want to set up a separate bank and credit card account just for your business. 2. Plan for all major and recurring expenses Although it’s likely that you’ll run into some unforeseen expenses from time to time, you should have a clear idea of what your major and recurring business expenses are. This allows you to create an annual budget and also set aside enough money to cover your recurring business expenses at least a month or two in advance. 3. Schedule time for bookkeeping on a monthly basis Another common mistake new business owners make is not organizing their bookkeeping on a weekly or monthly basis. They then face the enormous task of making sense of all the receipts and business transactions that built up over the entire year when they are preparing for tax preparation. So rather than letting it all pile up and promising yourself that you’ll get around to it eventually, make your bookkeeping a priority by setting aside at least one day each month that is fully dedicated to getting your accounts in order. 4. Develop a reliable bookkeeping system Even if you hire an accountant to manage your financial information on a monthly basis, daily accounting will likely fall on you. You will need to track the money coming in and going out so you have a sense of your financial situation throughout the month. You’ll need to develop a reliable bookkeeping system and stay organized. To make things a bit easier on yourself, you may want to invest in accounting software that will help you with things like invoicing, time tracking, and expense management. I highly recommend Quickbooks which is very affordable and user friendly. 5. Understand your tax obligations Since you’ll have to set aside enough money for your taxes each month, it’s important to understand your tax obligations and what deductions you might be able to claim. As a small business owner, you’re also legally required to keep business records for five years or more, so it’s important to find a reliable system for maintaining and backing up your records.