When you start your own small business, it comes with lots of new opportunities and responsibilities. One way to fulfill both of them and make sure your business stays open for as long as possible is to start off with good record keeping. While it's not very exciting, record keeping could make a world of difference to your ability to keep your company in the black. So, how can you create good records from the beginning? Here are 3 ways.
Create Client Records
Create a file for large clients (or perhaps all clients at the beginning) so that you can track all the work you have done for them and any agreements made. In this file, you should also keep copies of client communication and your own notes about the jobs or the customer. By tracking client individually, you can make note of their preferences, personality and future plans. Developing a client relationship that will last for years begins with knowing your clients well.
Keep Agreements Handy
All contracts and agreements you sign should be easily found and ready for consultation. Knowing what your responsibilities are is the best way to ensure that you fulfill them. Contracts can take many forms, so you may want to organize them by type (client contracts, vendor agreements, banking agreements, etc.). Even if you have informal agreements, it's good to write them down and add them to your contract files so you can honor them. For outgoing contracts, create a template or a standard agreement to give to those with whom you want to initiate a contract and keep blanks ready in this area as well.
Organize Your Accounting
Accounting and tax records will prove invaluable for trying to make a profit while paying the least amount of taxes possible. To create a good accounting records system doesn't require complicated accounting software or a full-time CPA. You can begin with a simple spreadsheet or journal tracking your income and your expenses. Make a file for each of the following:
- Vendor Invoices
- Bank statements
- Credit card statements
- Each type of tax paid
- Income records
- Sales receipts and client invoices
- Miscellaneous Business expenses
- Payroll
In addition, talk with your accountant (such as one from Waggoner Frutiger & Daub CPA's) or bookkeeper to help come up with your own logical method for organizing things like petty cash, travel logs, purchase orders and inventory. Whatever systems you develop, be sure they are written down and that everyone involved in your business knows how to use them.
Even though it's not much fun, create a good record keeping system as you start your new business will help not only keep you organized today but also ensure that you stay on top of things as your company grows.
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