Accounting basics for the work from home entrepreneur (5+Basic skills) - Fizah Mughees

 Abstract:

Accounting power not be the most interesting topic when you’re starting a business. It brings to mind complex spreadsheets and hours scavenging for receipts. But your business depends on good accounting. You started a small or medium company to make money – or at least run a sustainable enterprise – and you will never achieve this without tools like a balance sheet, tax documents, and a budget or forecast.

Being able to move money around to purchase supplies, pay creditors, and attract investors is often just as important as developing and executing your business plan, especially in the early stages of your business. More simply, accounting is recording all the financial information for your company, without accounting, you won’t be able to keep find of your business, you won’t know whether it is successful or not, and you will likely have problems with taxes. You need money to pay your bills.

Here are all the essential accounting basics that you, as an entrepreneur, should know to make 'work from home' work for you.

 

1. SAVE FOR TAXES

Yes, you will require paying taxes. Star Too much planning for it. The tax rules and regulations that apply to your business depend on the nature of your company, where you are, and what you sell. You will require to do some research and probably talk to an accountant to know exactly what rules apply.

During the start some years, many startup businesses will lose money. In that case, you probably won’t need to pay any income tax, but you will still need to file an income tax return for your business. When you do start making money, you will need to start paying income taxes.

 

2. Open a Business Bank Account

First of all you've select your company's name and have it legally registered, it is time to get a separate business bank account to record all the income and expenses. Having a separate bank account will help you organize funds and plan for taxes. To get a small business bank account, all you need to have is a legally registered business name and a few essential documents like ID proof, address proof, etc.

Before you select a bank to get a business account, make sure it satisfies certain requirements.

 

·         Compare the banking and related services offered by different banks

·         Make sure the bank has its ATMs near your home for convenience

·         Check out the transaction limits of different banks and make sure it works for your home business.

3.  Maintain a Balance Sheet

Make professional business owner

Keep up a balance sheet is essential as it captures a clear picture of your business' financial health. It will assist you quickly figure out both assets and liabilities. Also, it will help you find out what resources are available and what you owe others. As a online work  from home entrepreneur, you can keep your business in check using a balance sheet. The balance sheet will give you a good understanding of where your company currently stands and its feasibility for its future growth.

4.  Register Your Business

The first step in getting a handle on your finances as an entrepreneur is to register your business. You’ll also need to make sure you have all the necessary business licenses, which vary by industry and state. This business license guide can help you find out what you need. You can choose from a few different business models to register your business, including:

·         Corporation

·         Sole Proprietorship:

·         Limited Liability Company

·         Partnership

 

5.  Pick Your Payment Methods

Once your business is off the ground, it’s time to get paid for your hard work. To do so, you’ll need to decide which payment methods you’ll accept from your clients. If you’re just starting out you can stick to simpler payment methods, like checks and cash. But if you offer more flexible payment options, you may find that your clients pay you faster. Here are some other options to consider:

·         Credit Card Payments: If you have a brick and mortar shop, you may wish to set up a point-of-sale (POS) system and accept credit and debit payments in person. You’ll have to pay transaction fees every time a customer pays with a credit card.

 

·         Mobile Payments: Mobile payment providers like Square are a great option for entrepreneurs who conduct their business outside an office. You’ll get a mobile card reader that attaches to a smartphone and pairs with an app to accept payment from anywhere with an internet connection.

  

·         Online Payments: Online payments are a convenient payment option that many of your clients will be familiar with. You can either set up online payments through your website using a third-party provider like Stripe, or you can accept online payments directly through your cloud-based accounting software.