3. Set Up Finances and Accounting for Your LLC
Once you form your LLC, there are important next steps to ensure your business finances and accounting are organized for tax season and peace of mind, and that your personal and business finances are kept separate to ensure safety of your personal assets. With the right accounting steps, your business will run smoothly and be set up for increased profits and success.
Choose a Bank
The right business checking account for your business should have minimum fees, so that your money goes into the business or your own checking account instead of spending on hidden, tricky bank fees. According to NerdWallet — which looked at the 10 biggest banks in the U.S. and some additional online banks — these are the four best free business checking accounts for your LLC:
Best Free Business Accounts
Separate Business & Personal Expenses
Once you form your LLC, it’s important to keep your business and personal assets separate to protect your personal assets from liability. It also makes tax season a whole lot easier when you have one clear account with all your business expenses, instead of all expenses mixed up within two accounts that need to be sorted.
Once you choose a business checking account for your LLC, make sure you receive a business checking card or apply for a business credit card that you can use for all business expenses. You can also use a tool like Expensify to track and tag business expenses from your mobile phone.
Consider a Small Business Credit Card
After you've established your business as a legal entity, it's smart to consider getting a business credit card. But which one is right for you, and which features should you examine before choosing one? Factors such as 0% intro APR will help your business carry an interest-free balance during the initial period. Similarly, welcome offers are a great way to add free money to your business spending. Not to mention, in the long run, a business credit card can help you save thousands per year from cash-back offers and reward points.
The list of rewards and bonuses for signing up for a credit card is plenty and should be factored in while zeroing in on a credit card suitable for your business. To help you get started, check out our list of the top 10 business credit cards that we highly recommend for small businesses.
Set Up Accounting Software
Choosing the right accounting software will allow you to track your accounts receivable — the money that is flowing in and out of your business. Accounting software will allow you to track bills, invoices, expenses, and customers. This is also another important step in simplifying your year-end tax burden. With a clear, separate business checking account and card and an organized accounting software system, you’ll (barely) dread tax season as a business owner.
Here are some favorite accounting software options for LLC business owners:
Determine How You’ll Accept Credit Cards
If you use QuickBooks or FreshBooks, you’ll be able to accept credit cards to pay for invoices. If you have a brick-and-mortar location for your small business, you want to look into offering payments through a service such as Shopify or Square.
Look Into Business Funding Options
In case your business runs out of cash flow, you want to have a backup option so your business doesn’t go under. You can raise capital from investors, ask friends or family for loans, get a business credit card, take an online business loan, or look into government financing using the SBA & Business USA’s financing tools.
Also, it’s important to remember that you can also bootstrap your business, which means only using the funds you have in your bank account and not expanding until you get more business income.
