The most important initial steps to take as a start-up business are setting up a proper business checking account and having the appropriate accounting and inventory tracking software in place. Setting these up from day one and then following up by using them correctly will save you a lot of heartache and backtracking down the road.There's nothing worse than trying to put together financial and/orinventory records for something that happened months, or even years, ago. Avoid the pain by getting started on the right foot. Back to top Business CheckingWhen you open a business, one of your first responsibilities is to open a business bank account. It is important to keep your business banking separate from your personal banking, even if you have Sole Proprietorship. It will not suffice to simply keep separate records on an excel sheet. Although it is not mandatory, many business owners even use different banks for their business and personal accounts, one being a business bank only.If your business is incorporated, the IRS requires that you keep a separate business bank account. It doesn't matter if your business is a full corporation, partnership, LLC or an incorporated sole proprietorship. If you're incorporated, you must have a separate account (seeBusiness Types).Selecting a bank and accountWhen choosing which financial institution to open your first business checking account, don't just pick the bank that you are using for your personal banking or the one that is closest or most convenient to you. Review all the available materials and take into consideration the following issues: Shop around, sometimes smaller/regional banks or credit unions are the way to go as they know your community and are often more forgiving when it comes to lending and overdrafts. Does the local bank have lending authority? (Should you choose to apply for a small business loan in the future) Larger banks typically have lower fees than smaller community banks and may offer your business a business credit card. Will the bank work with the SBA loan system? This is a loan with more flexible repayment terms for businesses with credit histories, cash flow and collateral that are inadequate for traditional loans. Does the bank offer online banking? Online banking saves you time and money and gives you access to your account 24/7. What fees are charged by the institution? Is there a monthly fee or a fee for a certain number of deposits or checks? Is there a minimum balance that must be maintained?What documents are required?Opening a business account in the name of the business has gotten a bit more strict with the implementationhomeland security regulations over the past several years. No matter the type of buisiness, you will need two forms of personal identification (generally government issued identification) and your social securitynumber.Additional documents required will depend on your business type. Keep in mind that some documents may be called different things in different states. Banking institutions may also require their own internal forms. In general, you are likely to need: Sole proprietorship : Social security number (SSN) or Employer Identification Number (EIN) Assumed Name OR Business License Partnership: Employer Identification Number (EIN) Partnership agreement (or if no agreement, a statement stating so signed by all the partners) Assumed Name OR Business License Certificate of Limited Partnership (Texas only) LLC: Employer Identification Number (EIN) Articles of Incorporation (usually notarized as filed with the state) Operating Agreement Assumed Name OR Business License Resolution, signed by all members of the LLC, authorizing you to open the checking account. Corporation: Employer Identification Number (EIN) Articles of Incorporation or a Certificate of Good Standing Corporate resolution Back to top Accounting & RecordkeepingIf you have a separate account for your business transactions, then you have a clean record to give to your accountant at the end of the year. Remember to keep all your invoices and receipts to match up to your checkbook and bank statement entries so you will be in good shape when income tax time rolls around. Intermingling your purchases and revenues in your personal account can make it very difficult to identify and report your income and expenses correctly, and makes it much harder to determine if you are making aprofit - and if so, how much. Start fresh and clean with a new and proper business account.Accounting SoftwareThere are many types of accounting software on the market. Choosing and purchasing one for your businesswill be an investment but it will save you money in the long run. Having a good accounting system will help youtrack your income and expenses carefully in order to file your tax return, determine your profitability and wise financial decisions for your start-up company.There are several top-selling accounting software options: Quickbooks® by Intuit® Quickbooks® by Intuit® has both desktop programs and an online solution, both have tiered additions and add-ons. This is by far the most widely used and it has the added benefit of being used by most CPA's so when it comes time to do your taxes if you utilize a CPA they will know how to navigate your system seemlessly. Quickbooks desktop software is available in most office supply or computer stores, and at online retailers (check for available discount coupons). Quickbooks online is available here. Safe 50 by Sage Software Sage 50 Accounting (formerly Simply Accounting and Peachtree Complete) is easy-to-use accounting and business management software that provides you with the tools you need to manage your financial transactions and to streamline your business tasks.Comparable to QuickBooks, but geared to the Canadian marketplace. They offer both an online version and a several levels of desktop software, as well as additional add-on services. Sage Products and Solutions for more details. Cougar Mountain Software Cougar Mountain Software offeres several different accounting packages, as well as other related business software. You can get information or request a demo rel='nofollow'> here. Back to top InventoryOne of the best ways to track your inventory of supplies and products, recipes, invoices, sales & use tax, packaging etc. is by using Soapmaker™ Software. There is a Professional and a Lite version. The only downside to this software is that it is not MAC compatible and information must be entered into both your accounting software andinto this program in order to be effective. HSCG Members receive 10% off the price of Soapmaker software so don't forget to use your member discount if you choose to use this program. Back to top Tax and Accountancy AdviceIf you are uncertain about the best way to keep your accounting and inventory records, consider takingclasses and/or meeting with a accounting or tax professional for advice in how to get your recordsset up and how to maintain them. Keep in mind, also, that your profits (or losses) from your business activities (regardless of the type ofbusiness) will have tax ramifications. Depending on your situation, you may be obligated for self employmenttaxes and/or need to file quarterly estimated tax payments in order to avoid underpayment penalties. If you areunsure if you may have tax payments due, consult a tax professional. Back to top Be a BUSINESS, not a hobbyIf you have business losses that you deduct from your income three consecutive years, then the IRS may decide you are conducting a \"hobby business.\" All losses and no profit for a real business can be a red flag to the IRS,and you may be inviting an audit. It can be tough to turn a profit in three years, and even if you do show up in the black, you are not necessarily safe from an IRS audit. Having a separate business bank account and a well-maintained set of business books can go a long way in proving you are a legitimate business and not just a hobbyist.";echo ""; // end colecho ""; // end rowecho "