The next thing that you need to do is to set up proper record keeping. Most record keeping has to do with the tax authority, but it’s also good to keep records for other reasons. With good record keeping you’ll soon understand how much money you are earning, and whether your business is profitable or not. You’ll also be able to easily identify what works, and what does not work in terms of generating revenue for your business.
Every business is different but in general you’ll need to decide on the following items:
Filing System
Will you use paper at all or will you have a paperless filing system? If you use paper, and you deal with private information ensure that you have a file cabinet that locks and complies with all relevant laws. If you use digital files only, you will still need to be sure your system is safe and compliant with regulations in your industry. Always ask about security when it comes to your data that is stored online.
Another consideration is to decide what type of person you are when it comes to keeping records. There is no use trying to go outside of your own comfort zone. If you are a paper person assume you’ll print records and have paper files. Do what works best for you so that the information you need is always at your fingertips.
Bookkeeping System
Do you know how you’re going to keep track of your financial inflow and outflow? Will you use bookkeeping software, a paper ledger or a combination of the two? What type of system will work best for you? Today, there are all kinds of systems online that enable most of your bookkeeping needs to be automated.
With a combination of software like Outright or QuickBooks and a payment processing service like PayPal, you will hardly need to do any data entry at all. Plus, as of the writing of this report, if you only accept payments via third party payment system like PayPal, outside of some professionals such as accountant and lawyer, no one needs to send you a 1099, and everything will be kept in one location.
Most services businesses run on a cash basis. This means that money is realized and booked the moment it is received, and money is realized or booked the moment it is spent. This is the simplest method and as a sole proprietor or an LLC, with no inventory, this is the method that will work best for your needs. Don’t complicate things that don’t need to be complicated.
Project Management System
A good project management system will be a cloud-based system that you can view from anywhere and via multiple devices with just an Internet connection. There are several types of Project Management Systems that you can use online; one that is very popular is Basecamp. Essentially the system enables you to create an account and sign on for your clients where all the information and documents about their projects are stored.
You can even get a free trial of the Basecamp software.
With a good project management system you can keep track of time spent on each project, enter in reimbursable expenses and more. You can also assign various tasks to other people through the system such as Virtual Assistants, Graphic Designers or anyone you choose to outsource to.
Project management systems allow you the ability to monitor when tasks have been completed, and helps develop the trust of your clients since they can sign on when they want to in order to see your progress. Starting your business on the right track by using a good project management system right away will make you look more professional and keep you organized.