Accounting Categories for Small Business Startups
If you’re a small business owner who is just getting started and trying to figure out what kinds of expenses you’ll have and how to categorize them for accounting purposes, this guide will introduce you to the basics of accounting categories for small business startups, how to track them, and what to do with the information. By the end of this guide, you’ll be ready to get your business’s finances in order. Here are your accounting categories to consider:
1. Outsourcing Partners
Outsourcing partners is one of the main accounting categories for small business startups. Outsourcing is a great way to save money and time, but there are a few things you need to keep in mind.
First, when it comes to outsourcing partners, it’s important to make sure that you understand all the services you need. For example, you’ll need professional moving services. There are many commercial moving companies out there, so it’s important to do your research and find one that’s reputable and has a good track record. You’ll also need to outsource landscaping work to a professional landscaping company that can recommend the best commercial landscaping material, one that offers necessary services within your budget. Outsourcing your IT services is also a good idea as outsourced IT services are scalable, offer more robust disaster recovery, and give you more time to focus on other business operations.
Once you’ve found a reputable outsourcing partner, you’ll need to sign a contract. This contract will outline the services you’re outsourcing, the price you’ll pay, and the timeline for the project. Be sure to read over the contract carefully before you sign it. Once the contract is signed, you can start working with your outsourced partner. You can also outsource your accounting to a professional. They’ll handle all of the accounting, bookkeeping, and any other vital service needed by your business. This will free up your time so you can focus on other aspects of your business.
2. Hardware
Hardware is also one of the main accounting categories for small business. Hardware is anything that can be touched or held, which includes things like furniture, tools, and equipment. It’s important to account for all of your business’s hardware because it can be expensive. You have a few options when it comes to acquiring hardware for your business. You can buy new items, secondhand items, or lease items. You’ll also need to decide what type of automation solutions and electrical services make the most sense for you.
Buying new hardware can be expensive, but it has its advantages. New items are usually under warranty, so you’ll be covered if anything goes wrong. Plus, you’ll have the latest and greatest technology at your fingertips. Secondhand hardware can be a great way to save money. You can often find good quality items for a fraction of the price of new items. Just remember to do your research and inspect the items carefully before you buy them.
Leasing hardware can be a good option if you’re not ready to make a long-term commitment. It’s also a good way to try out new technology to see if it’s a good fit for your business. When it comes to automation services, there are a few things you’ll need to consider. These include the type of business you’re running, your goals, and your budget.
Some businesses will need more automation than others. For example, if you’re running a manufacturing business, you’ll need to have a way to automate your production process. On the other hand, if you’re running a service business, you may not need as much automation.
Commercial electrical solutions are another important consideration. You’ll also need to make sure you have the right type of commercial electrical service for your business. If you’re not sure, it’s a good idea to consult with a professional.
3. Legal Needs
Maybe you’ve been told by well-meaning friends and family that you need to get a lawyer on board, but aren’t sure why. After all, you’re not doing anything wrong. The truth is, legal counsel is one of the main accounting categories for small business if you operate within the law as a business owner. There are several reasons why you need a lawyer, even at this early stage. First, a lawyer can help you navigate the often confusing world of business law. There are a lot of rules and regulations that apply to businesses, and it can be tough to keep up with all of them. A lawyer can help you make sure you’re in compliance with all the relevant laws.
Second, a lawyer can help you protect your business interests. This includes things like drafting contracts, negotiating deals, and handling disputes. Having a debt relief lawyer on your side can help you avoid costly mistakes and disputes down the road. A legal service can help you raise capital for your business. If you’re planning on seeking investment from venture capitalists or other investors, a lawyer can help you put together a strong pitch.
A lawyer can also help you with intellectual property issues. If you’re developing a new product or service, you need to make sure you’re not infringing on someone else’s patent or copyright. A lawyer can help you with the paperwork involved in registering your own patents and copyrights. A legal provider can avail valuable advice on a variety of other issues. From employee issues to tax law, there are a lot of potential pitfalls when you’re running a business. A lawyer can help you steer clear of them.
Finally, a lawyer can help you plan for the future. If you’re thinking about selling your business or taking it public, a lawyer can help you with the complicated legal process involved. Legal needs are among the main accounting categories for small business without which you’ll get into costly trouble. Get started on building a strong legal team for your business today.
4. Sanitation
Sanitation is also one of the main accounting categories for small business. There are a few things to consider when looking for sanitation services. First, what kind of business do you have? If you have a food business, then sanitation is definitely an important expense to account for. You’ll need to make sure you have enough money budgeted to pay for things like commercial janitorial service and commercial plumbing services. Second, do you have a lot of inventory? If you do, you’ll need to make sure you have enough space to store it all as this will affect your sanitation efforts. This means you might need to budget for commercial storage.
5. Payroll
As a small business startup, you will need to understand the different payroll accounting categories for small business and how they work. This is important so you can correctly file your taxes and avoid penalties. The first category is salaries and wages. This includes money that you pay your employees for their work. This can be a regular salary, hourly wage, commission, or bonuses.
The second category is payroll taxes. This includes any taxes that you withhold from your employees’ paychecks, such as Social Security and Medicare taxes. You will also need to pay federal and state unemployment taxes. The third category is benefits. This can include health insurance, life insurance, and retirement plans. You may also offer other benefits, such as paid vacation or sick days.
The fourth category is payroll expenses. This can include the cost of running the payroll, such as software or service fees. It can also include the cost of printing paychecks and mailing them to employees. The fifth and final category is payroll deductions. This can include things like health insurance premiums, 401(k) contributions, and union dues.
6. Advertising
Advertising can be a great way to generate revenue for your small business. It can also be a great way to attract attention to your business. However, before you start spending money on advertising, you need to understand how it works.
Advertising is one of the accounting categories for small business startups. This means you will need to track your advertising expenses separately from your other business expenses. Additionally, you will need to track your advertising revenue separately from your other business revenue.
There are a few different ways to finance your advertising. One is to use your own money. Another is to use advertising credits, which are given to businesses by advertising agencies. These agencies then use the credits to purchase advertising on behalf of businesses. If you’re going to use advertising to market your small business, you need to be aware of the risks. One risk is that you may not generate enough revenue to cover your advertising expenses. Another risk is that you may not generate enough attention for your business to be successful. It’s important to understand the risks involved before you get started.
7. Receivable and Payable Accounts
Receivable and payable accounts are also among the important accounting categories for small business because they help you keep track of the money you owe to others and the money that others owe to you. This is important information to have when it comes to managing your finances and making sure that your business is running smoothly.
There are a few different ways you can set up your receivable and payable accounts. You can have separate accounts for each, or you can combine them into one account. Whichever way you choose to do it, you need to make sure that you keep track of these accounts carefully.
One way to keep track of your receivable and payable accounts is to use accounting software, which can help you keep track of all of your financial information in one place. It can also make it easier for you to see where your money is going.
Another way to keep track of these accounts is to use a spreadsheet. This is a good option if you want to track your finances in a more detailed way. You can set up a spreadsheet with all of the information about your receivable and payable accounts, and then track the information manually.
It doesn’t really matter how you choose to keep track of your receivable and payable accounts, just do it in a way that works for you. However, you need to access the information easily, and it should be easy to understand. Taking the time to set up a good system for tracking this information can save you a lot of time and effort in the long run.
8. Rent and Utilities
Rent and utilities can be a significant expense for small business startups. Keep track of your monthly expenses so you can budget accordingly. This will help you keep your business finances in order and avoid overspending. Utilities can include electricity, water, and gas, expenses that vary from month to month, so it is important to track them closely. You may want to set up a budget for utilities so that you can better predict your expenses.
Rent is another important expense to track. Your lease agreement will likely include information on how much rent is due each month. Track your rent payments so that you can stay up to date on your obligations. By tracking your rent and utility expenses, you can better manage your finances and add efficiency to your accounting categories for small business. This will help you stay on budget and avoid unexpected expenses.
9. Office Supplies
As a small business startup, you’ll want to consider office supplies as an accounting category. Office supplies are a necessary part of a business and, therefore, need to be accounted for. Some examples of office supplies that you may need to account for include pens, paper, staplers, paperclips, and envelopes.
You can track your office supplies expenses in several different ways, but one of the best is to set up a separate office supplies account in your accounting software. This will help you see exactly how much you’re spending on office supplies and also allow you to budget for this expense.
These are some of the main accounting categories for small business startups. To understand which categories apply to your business, talk to an accountant or a financial advisor. They will help you figure out what goes into each category and how they affect your business.
