Entrepreneurship means something different to everyone. For some, it means spending millions to establish a new corporation. For others it means working at a Rancho Cucamonga kitchen table and saving enough from your pay check to cover required fees. The financial differences between these scenarios are infinite, but there is one striking similarity, and that is the importance of good bookkeeping and accounting.
Whyte & Associates, Inc. offers a variety of scalable solutions, from just the basics to full payroll, accounting, tax planning, and more. Here we discuss a few things that entrepreneurs of all types need to consider when starting a new business.
Tax strategy is just as important for the kitchen-table entrepreneur as it is for the mega-corporation. Ideally, this should begin before your business actually exists. That is because one of the most important decisions you will make is your legal structure. Sole proprietorship is usually the simplest and least expensive upfront, but it may not be an option if multiple people are involved. Partnerships may be general (GP), limited (LP), or in certain types of business limited liability (LLP). Additionally, the corporation or limited liability company (LLC) structures sometimes make more sense, even for small business.
When choosing your business structure, as well as establishing a bookkeeping system, don’t just look at where you are now. No matter how big or small your business starts, odds are you intend to grow. For example, you might start as a sole proprietorship with the intention of taking on partners later, or as a corporation with plans of expanding into other states. These types of changes can be more complex than you anticipate. Look ahead so that you can make smart decisions now and create a solid foundation for growth.
If you are taking orders and keeping the books, remember that it probably won’t always be that way. Down the road you’ll likely have employees processing transactions and an accountant preparing statements. Be consistent and document your processes in a way that others could understand. This will make it much easier if you need a professional to review your books, or if you transition financial duties to someone else.
Fully outsourced bookkeeping has virtually endless benefits, but it may
not be the right choice for everyone. If you are just starting out on a
shoestring budget, keeping your own books might be the only feasible
option, while large companies may have an accounting team on staff.
However, the choice isn’t “all or nothing,” thanks to our flexible
services. Without a background in accounting, some tasks can be
overwhelming, and a simple error may be very costly. Furthermore, your
time is valuable, and in short supply. In the big picture, professional assistance can be the most cost-effective option, especially in areas such as:
At Whyte & Associates, Inc., we offer monthly, quarterly, or annual bookkeeping, as well as a host of other valuable financial services, a few of which are highlighted above. From personal finances to opening, closing, or operating a business – you can count on us. Just call our Rancho Cucamonga office at (909) 575-0080.