It’s October which means cooler weather, scary movies and Halloween is right around the corner. This is such a fun time of year and it can even get a little spooky! Between ghosts on TV and ghosts trick-or-treating, you can see ghosts everywhere this month. The one place you don’t want to see any spooky ghosts is your business’s accounting. Let’s review a few ghosts of accounting past so you can avoid them in the future.
- Keep Personal and Business Finances Separate: We know this may seem like something that isn’t a big deal but trust us, it is. It is important to have a clear and trackable history of where your business’s money is coming in and going from. When you have your personal finances together with the business, it can make it difficult to keep track of where everything should be going. The steps to keeping these things separate are easy and will be well worth it in the end. Open a business checking account and credit card, make sure you are paying yourself with a paycheck or other payment that can be tracked and track your expenses. All these things will help make sure you avoid any confusion in the future.
- Use an Accounting Software, not Excel: Excel may seem like the right choice for your accounting when you start your own business, but it is not. Excel is great for a lot of things but managing a function as important as your business’s accounting is not one of them. There is so much room for error when using Excel. What if your formula got deleted? What if you transpose number or put the information in the wrong cell? The errors themselves are a problem but trying to fix them can be an even bigger problem. With multiple spreadsheets and workbooks finding errors can be a hassle. Just avoid this stress and use an accounting software. Even if you are just starting out, software like QuickBooks offer a cost effective and user-friendly accounting software options.
- Collect W-9s from All Vendors: This may seem like an obvious one but when you get busy it is easy to forget. It is always a good idea to get a W-9 from every vendor before paying them. This will come in handy come January and 1099 season. By a having a W-9 from every vendor you can easily make sure you are sending the proper paperwork out. It will also make your life 100 times easier if you do have to send out a 1099. You won’t have to scramble or rush to try to get that information from the vendor in a time crunch.
We hope that you found these tips helpful and insightful. Remember, we are always here to help chase the ghosts away from your accounting. Think of us as the Ghostbusters of the accounting world. Happy Halloween!