7 Things All Start-up Companies Should Know

Entrepreneurs should heed this advice, plus seek expert help.

By Andrea Diaz On Dec 28, 2018

Starting your own business can be one of the most exciting things you will ever do, but it can also be one of the most daunting and overwhelming tasks. Here is a list of seven things all start-up companies should know to help get the ball rolling.

Type of Entity – Choosing the right entity structure for your business is one of the most important decisions. The determination will impact the vulnerability of your business as well as tax implications and many other items. Get together with your attorney and accountant on this one before setting anything up. Each business is unique, and the right guidance and advice is imperative.

State Registrations – All businesses must register with every state in which they conduct business. This doesn’t automatically happen once you form your company, and this step is crucial. Most registrations can be done online, but similar to step one, meet with your attorney and accountant for the particulars. 

Open a Separate Bank Account – As soon as your entity is formed, set-up a separate bank account for all business income and expenses. The sooner you segregate your business assets from your personal assets, the better.

Establish a Business Credit Card – We all use credit cards and the last thing you want to do is use your personal credit card for business expenses. At the end of the year, it becomes a nightmare to distinguish between business and personal expenses. If you delay on opening a separate business line of credit, you will undoubtedly lose out on deducting all eligible expenses if they are embedded on your personal credit card. 

Accounting Software – Whether you chose QuickBooks, Sage, Quicken or any of the other various forms of accounting software, don’t hesitate! Keeping track of your income, expenses and business plan with an easy-to-use software will assist you in obtaining financing, understanding cash flow and making every day business decisions. The sooner you get it organized in one place, the easier your decision-making process will be. 

Payroll – Once you are ready to hire your first employee, hire a payroll company! Yes, most accounting software allows you to process payroll through their system, but every state has its own complexities and payroll companies can be a wonderful resource with their expertise.

 Sales and Use Tax – This is a hot topic for many states these days and you don’t want to mess this one up. Every state has different rules, so make sure you’re getting advice from your accountant on when your business is required to collect and remit sales tax.

Having the advice and guidance of the experts is a must, but this is a good start. Good luck!

About the Author: Andrea Diaz, CPA/ABV, MST, is a tax manager at SKC & Co. CPAs, LLC in Boonton Township. She specializes in working with entrepreneurs in all aspects of their businesses.

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