Denver Accounting Services – New Business Accounting 101
As a business owner, you probably have about four trillion things to take care of and accounting is probably not the most exciting task on your list. In fact, many business owners consider accounting and bookkeeping a huge pain in the ‘you know what’ and they ‘wish someone would take it off their plate.’ Sound business advice and stress relief are two of the biggest benefits of hiring a certified public accountant.
The following information is indented to give you a high level overview
of some of the key elements you—
and your accountant—will need to work through.
Selecting the Right Business Structure
Corporation? Or S-Corp? Or LLC? Each business entity has various tax, liability and management advantages and disadvantages. It is important that you select the right entity for your business. A good tax attorney or Denver accountant can help you make the right choice. Also, you can find free information on the internet about the differences between each entity and then discuss your options with your accountant.
Applying for an Employer Identification Number (EIN)
Once you set up your entity, you will need to apply for an EIN number from the IRS. A link to the application can be found on our resources page. Your EIN number is like your business’s social security number. You will need this number to open up bank accounts and pay taxes.
Business Bank Accounts
One of the main reasons for setting up a formal business entity is for the limited liability protection they offer. In order to maintain liability protection, among other elements, a business must keep its finances separate from personal accounts. Beyond the liability issue, it is simply good business practice to have separate bank accounts for your business. When selecting a bank, be sure to ask about the fees associated with various accounts, bank loans, credit cards and other financial products.
Business Insurance and Licensing
Although not directly related to accounting or bookkeeping, when planning your initial budgeting and forecasting, make sure you include a line item for business insurance and any state or local business licensing requirements (sales tax license, business license, health licenses for food related businesses, etc.).
Selecting and Setting Up Accounting Software / Systems
There is a variety of accounting software options. If you have not already set up QuickBooks or another similar software package, you may want to discuss this decision with the accountant that you plan to hire to consider their preference. Most Denver accountants offer software consulting and services to help you set up your books correctly. Getting your books straight at the outset will save you time and money in the long run.
Hiring the Right Denver Accountant or Bookkeeper
If you are considering hiring an accountant or bookkeeper, you may want to do that sooner rather than later. Any good certified public accountant that works with new or small businesses will be able to help you with most, if not all, of the above issues.
Read “How to Hire the Right Denver Accountant” or schedule
a free consultation with pre-screened accountants in Denver, Colorado
right now.
