When launching a new business, there’s much to consider—branding, products, services, customers, and more. However, accounting is one of the most crucial elements often overlooked. Setting up your accounting systems correctly can save you time, stress, and money.
Why This Matters
- Even if you're not generating much revenue, it's still helpful to keep track of what you put into the business and what your expenses are
- Keeping track of your finances in the early stages can yield some tax benefits
- It's easier to set things up correctly from the start vs retrofitting the setup later
I don't have much to keep track of
Accounting is the best way to understand your business’s financial health. At its core is the basic accounting equation:
Assets = Liabilities + Equity
- Assets: What the business owns (cash, inventory, property)
- Liabilities: What the business owes (loans, bills, fees)
- Equity: Your share of the business, including invested capital and net income.
Every financial move—like investing cash (increasing assets and equity) or taking loans (increasing liabilities and assets)—affects this equation from day one. Your goal is to use assets to generate income and grow equity. Without tracking these, how will you know if your investments and expenses are paying off? That’s why accounting is essential, even if it feels like you only spend at first.
If you took advantage of outside investments or loans, your creditors would want to see some account of what you did with the cash you received.
It can help with taxes!
Good accounting keeps you prepared for tax season. Accurate records in your accounting software help your tax professional optimize your return. In the U.S., depending on how your business is structured and your tax election
1. Business income (or losses) can offset taxable income (sole proprietorships, partnerships or S corporations)
2. Depreciation on business assets can provide additional tax savings over time.
3. You may qualify for Qualified Business Income Deduction
Proper categorization ensures you maximize tax benefits. Consult your tax professional for advice.
Get Started Today
Getting started with accounting is easier than you think. You don’t need to be a financial expert or hire a full-time accountant immediately. Simple tools like Quickbooks and WeOS can automate much of the work, from tracking expenses to generating reports.
Quick Start Steps
1. Setup an account with QuickBooks
2. Setup your chart of accounts
3. Use WeOS to automate the recording and categorizing all your business transactions
Once data is flowing into your accounting software, you can use the profit and loss sheet to understand how you're tracking income-wise for the current year, and you can use the balance sheet to understand the business's overall health in terms of the accounting equation. It's time you start making data driven decisions.
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