Episode 99 - Smart Small Business Bookkeeping
Bookkeeper Allena Steele shares her best tips for creative entrepreneurs to organize their finances and stay on the path of financial success.
You probably didn’t get into paper flowers for the money.
We certainly didn’t. But unfortunately, you can’t pay bills with creative spirit alone. So how can you set up your small business to make money?
It starts with smart bookkeeping.
In our latest episode of Paper Talk we chatted with Allena Steele of Steele Bookkeeping. She helps a wide range of entrepreneurs organize their finances and stay on the path of financial success.
We talked about the struggle of creative business owners to do just that. As Allena said: “So many people love what they do, which is the first ingredient to successful business, that they don’t really think about the money or organization part until they’re into it.”
Whether you’re beginning your paper flower journey, or if you’ve been making money as a paper florist for years, you’ll benefit from Allena’s advice on navigating taxes and bank fees, which software to use, and much more.
To get you started, here are three basic things she recommended on the podcast that all small business owners should be doing.
Listen to our conversation to hear:
► How to prepare before seeing a bookkeeper.
► The difference between a CPA and a bookkeeper.
► How to navigate fees for business bank accounts.
► Which bookkeeping software Allena uses and how to save on fees.
► How often to meet with a bookkeeper.
► The pros and cons of writing off business expenses.
Open a business bank account
Your business funds should be separate from your personal money. This was Allena’s number one recommendation. No matter how little money you’re making, it will make bookkeeping and taxes easier in the long run.
Ideally, you should do this from the very beginning, but better late than never if you haven’t. Gather your business licenses and documents, and head to your bank as soon as possible.
Now, we know that when you’re starting out, every little fee matters a great deal. We asked Allena about how to navigate bank fees for business accounts, and you’ll want to listen to our entire discussion about the best options for you.
Use a tax savings account
Even if you don’t pull in a lot of income, you will still have to deal with taxes. Sales tax, filing taxes—as Allena put it,
“Taxes are always going to come. They’re not going anywhere. So being prepared for that is amazing.”
The best way to stay on top of taxes is to open an account where you can park that money until it’s time to send it to the government. A bookkeeper can help you better understand how much to set aside if you’re unsure. The goal here is to avoid any surprise tax bills. You’ll always have the money ready to pay.
Now taxes can get tricky. In the episode, Allena explained the difference between a bookkeeper and a CPA, and when you should use which—in particular, when it comes to taxes and regulations. You can also hear more about tax write-offs for business expenses and the pros and cons of claiming those.
Organize your financial information
While Allena has a preferred software system, she said,
“As long as you’re keeping track of stuff, any bookkeeper...can help you out.”
When your business is new and not very complicated, you might not want to invest in a bookkeeping software with monthly fees. That’s completely understandable! At a certain point, those systems are going to make your life easier, but the most important thing is that you are organizing your finances. Every financial transaction should be documented and stored in a central place.
You can hear more on the podcast about how to save on monthly software fees, as well as which system Allena prefers and when you should start investing in bookkeeping software.
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