Some practical business advice when you are starting out or beginning to track your finances.
One of the first things I recommend business owners do is to separate personal and business items. If you are in business and did not do it from the beginning, do it going forward. Set up separate business checking accounts and credit cards. This will make it so much easier to set up software to track your finances and for actually assessing how your business is doing.
Second, keep track of receipts, invoices, or anything you receive when you make expenditures in the business. Owners used to give their bookkeepers piles of receipts for creating their financial statements. Nowadays, most receipts are in electronic form, but that doesn’t mean you shouldn’t keep them. If expenses are getting deducted against your business, the IRS can still audit you for a number of years and you will need to prove the expenditure was made. Credit card statements are okay but not the best option, especially if you do not download them from the bank. The bank is only obligated to maintain them for a few years as well. Find a system that works for you to file your emailed receipts. I like to set up folders for them in my email box and just move them there for storage.
Feel free to reach out to me If you have any questions on best practices when starting your business.