One decision you'll find yourself faced with is if or when you should turn your bookkeeping over to someone more qualified. While the anticipation of self-employment has it's thrills, the "work" of keeping the books can frequently be intimidating unless you are already familiar with business operations and record keeping. Consequently, you'll want to try to assess whether you ought to do this on your own or pass (or should I say...delegate?) this to someone more equipped for this kind of work.
There are several routes you can go. Some require more digging than others. If you have an acquaintance who is comfortable with establishing and maintaining an accounting system, find out if they will be willing and able to handle your books for the kind of business you'll be running. Don't look for the cheapest person you can find. You might get what you pay for. This person has to be willing to put the time you need to understand your methods and also point you away from risky practices and habits. In addition, you will need to listen to this individual as an advisor, especially if he or she has a lot of expertise in accounting and business management.
Another source is an independent bookkeeper. This person, presumably, has been through enough clientele to be able to set up your books and report your income and expenses properly for tax purposes. While many of these people work out of their homes as a sideline income, others have their own offices and run a suitable practice to meet your needs quite well.
Option #3 would be to use a CPA or public accounting firm. If you know someone with these credentials who will offer you a bargain of a service, jump at it. My opinion is that if you are intent on a large start-up or are assured through your business planning that you will grow quickly, you should choose a CPA. If you expect to operate out of your garage or "second-rate" business space for several years before you think you'll really take off, save yourself some money early on and search out a capable friend, wife, neighbor or established bookkeeper and work with them until you are knowledgeable about what reporting requirements come up and how you will manage them as a business owner. Then you can progress to a more sophisticated bookkeeper.
One last possibility is to hire someone as an employee who can keep your books. This person will be a master of many skills until you have enough business to split some work off to another employee. You will want to check this individual's background so you can be sure they are able to handle numerous office tasks as well as your bookkeeping. If you aren't big on doing the paperwork, this person will be invaluable at keeping you organized. He or she must be able to handle your financial activity - for business and personal reasons - and report on how you are doing as time progresses.
You don't want to get to the end of the year and have to figure out how on earth you're going to sort through all your papers and do your tax return by the ominous April 15th. Anyone keeping your books must be able to prepare for this - even if it's you - to save stress, worry, interest and penalties.
Have a great day. Keep in touch.
Gary
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