Budgeting + Accounting for Your Small Biz
If you caught my last blog, you know that I get a lot of questions about what it costs to start your VA business. And luckily, the answer is NOT MUCH. I only recommend investing in one tool from the start, and the rest will come.
I also know that a lot of people fear starting their own business because they don’t have accounting or tax expertise. Honestly, that’s not an irrational fear, but if you’ve been around here for a minute, you know how much I believe that we can really figure out how to do ANYTHING, including the not-so-fun parts of owning your own business.
Here are my top 5 accounting essentials for all new businesses:
Open a business bank account to keep your personal and business transactions separate and your accounting clean. I use Axos Business Banking, but Bank Novo is another great one & really, there are a lot of great options! Just do your research and find what is best for you.
Establish a bookkeeping system from the start of your business and be diligent about keeping it up to date. This can be a simple Excel spreadsheet or you can invest in a tool like Quickbooks.
Keep your receipts! Be sure to have a record of all of your business-related expenses so you can claim them on your taxes.
Set aside 30% of your income for taxes (there are apps to help with this!), and plan to pay them quarterly. You likely won’t actually NEED to pay 30%, but it’s great to have that money on the side! I actually have a Business Savings account linked to my Business Checking and I set aside money for taxes in there, but it earns me a small percentage cash back by having that money sit there!
Have specific contract templates for the type of work you do (project, monthly retainer), and obtain a signature from your client prior to beginning work. I use Honeybook for my contracts (and many other things!). Although startup costs for Virtual Assistants are low, a customer relationship management system (CRM) is something I recommend investing in right off the bat to protect your business and streamline your customer service experience.
Because this is such an important topic, I have a whole section in my VA Bootcamp dedicated to your business structure, including a bonus module where I interview a tax law attorney. Even though it’s not the most fun part of owning a business, once you have a strong foundation set up, the rest is smooth sailing!