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So you’ve recently launched a construction business: Congratulations! But amidst all the excitement of starting your own business, you’ll need to learn how to run a small business and tackle a few not-so-exciting tasks — like managing your expenses and staying on top of your taxes. The bookkeeping professionals at Zera share three expense management tips in the sections below, so read on to start your construction business off on the right foot! 1. Separate Your Personal and Business Assets
If you’re still in the business formation phase, one of the most important steps you can take is to separate your personal and business assets — and choose a legal entity that offers the greatest amount of liability protection. As such, a limited liability company (LLC) is one great option for business owners — especially if you’re looking for operating flexibility, tax benefits (e.g. pass-through taxation), and a simple filing process. To save on attorney’s fees when starting a construction business, online formation services like Texas-LLC.net can help you to form your limited liability company in a few simple steps. If you choose to form an LLC on your own, however, be sure to review the business formation requirements in your state. In addition to forming an LLC, here are some other steps you can take to separate your personal and business assets:
If you’re hiring employees or contractors, you’ll also need to establish an expense management policy. This policy should include the business’s allowable expenses, instructions for submitting expense reports, and submission deadlines. 2. Track Your Expenses Daily To stay on top of your small business finances, you’ll need to get into the habit of tracking your expenses each day. Some examples of business expenses include utilities and office supplies, mileage, contract labor, bank fees, and software systems. Many business expenses are tax-deductible, including office supplies, electronics, and mileage. If you use an accounting software system, you can easily track your business expenses by linking the software system to your business bank account. However, you’ll still need to scan and upload photos of your receipts, and reconcile your business bank accounts. You’ll need your business receipts if you’re ever audited, so hold onto them for at least seven years (or forever). Other bookkeeping tasks to perform daily include backing up electronic data to cloud-based storage systems, updating inventory records, and depositing any checks or cash you’ve received that day. 3. Don’t Sweat the Small Stuff As long as you fully understand and comply with your tax obligations as a business owner, keep good financial records, and track your expenses each day, there’s no reason to fear tax audits, tax filing stress, negative cash flow, and other seemingly dire financial issues affecting small businesses. Tax audits, for example, are quite rare — and most can be avoided or completed by mail. However, it’s a good idea to hire a construction bookkeeper if you’re not comfortable with your financial record-keeping skills. Bring in the ProsA lot of hard work goes into running a construction business, and you may find you simply don’t have the bandwidth to properly track and organize your business expenses. But this is where professional bookkeeping services come in. At Zera, for instance, you can utilize accounting services such as bookkeeping and payroll, cash flow management and forecasting, and wealth management. Plus, you can schedule a free consultation to learn more about how professional bookkeeping services could benefit your small construction business. Expense management is an important part of business ownership, and falling behind on this task could mean poor cash flow, added stress at tax time, and profitability issues. With help from a pro, however, you’ll find peace of mind in knowing your day-to-day bookkeeping duties are being performed — even if you don’t have the time, knowledge, or interest to do it yourself. Are you preparing to launch a construction business? Start your business off on the right financial foot by working with the bookkeeping, payroll, and cash flow experts at Zera. To schedule your free consultation, contact Zera online.
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