The CFO for Small BusinessFirst money steps for a very small business
You're looking for first money steps because you're not ready for a CFO, or you're not sure you are, and you'd like to do what you can yourself. That's a sensible place to start. Tax CFO Steven Palmieri says some owners won't need Steven and his team yet. This page lists what to do on your own, and when it makes sense to call.
Ask whether I need help yet
Open a separate account
The IRS recommends opening a business checking account as one of the first things you do and keeping it apart from your personal account. Deposit business income into it and pay business costs from it. That one habit does more for your records than any software.
Keep records as you go
Hold on to the papers that show what came in and what went out. That means invoices you sent, deposit records, receipts, and statements. Photograph receipts the day you get them, so they don't disappear. The IRS says that in the usual case you should keep records for three years from filing the return, and at least four years for records of payroll taxes.
Set money aside for taxes
Nobody withholds tax from your business profit, so it falls to you. The IRS says individuals generally need to pay estimated tax during the year if they expect to owe $1,000 or more when they file. A habit that works for many owners is to move a share of each deposit into a separate savings account the day it arrives, and leave it there for taxes. What share is right depends on your income and your situation, and a short conversation can narrow it down.
Pick one simple system for the books
Choose a single place where your income and costs are recorded. It may be a basic program, a spreadsheet or a bookkeeping tool. The best one is the one you'll actually use every week. Switching systems often is worse than using a modest one steadily.
Set a regular time, such as Friday morning, to enter what happened that week. Fifteen minutes weekly beats a weekend of panic each quarter.
Keep business and personal apart
Pay business costs from the business account and personal ones from your own. If you slip, write down what happened and fix it. Keeping business and personal money apart has a one-month reset you can follow.
When to call for help
A few moments are good times to talk to someone. You hire your first employee. You apply for a loan or a lease. You wonder whether to become an S corporation. Your income jumps in a year. Your pay becomes unpredictable. Your return gets harder to prepare each year. The profit page explains why income jumps feel bigger on your return.
Some owners won't need us yet
If you have a few transactions a month, good records and a return once a year may be all you need for now. The free call will say so plainly if that's true for you. We'd rather you leave with a short list of things to do yourself than sign up for something you can't use. When the business grows, or the questions pile up, the call is still there.
Both sides. This page's subject is the start of both your own money habits and the company's. A separate account, a weekly entry and a tax set-aside protect the business and you at once. If you wonder where you stand, does a small business need a CFO can help you decide.
Ready for help, or not yet?
You will be talking to the Steven Palmieri practice.