New Business Setup & Bookkeeping in Exeter, NH

The short version

We set up the accounting side of a new business: entity choice, chart of accounts, bookkeeping, payroll and the internal controls that stop money going missing. The point is that you can tell month by month whether the company is making money, instead of finding out in April when your options have already narrowed.

You are good at the work. That is why you started. What nobody warned you about is that the work is the part that takes care of itself, and the money is the part that quietly does not.

The usual version goes like this. Invoices go out, you are flat out on the next job, and nobody chases the ones that never got paid. Six months later the business is profitable on paper and out of cash in the bank. Cash is what closes companies. Profit is an opinion until it lands in the account.

Set up properly at the start, none of that is hard. It is a chart of accounts that matches how you actually run the business, a habit of looking at it monthly, and somebody chasing what you are owed.

What we set up

The books

A chart of accounts built around how the business actually works, so the categories mean something to you rather than to an accountant. Done right, your monthly numbers answer the two questions that matter: is the company making money, and where is it going.

Money coming in

Staying on top of unpaid invoices sounds like the boring part and it is the part that kills people. Waiting too long to collect what clients owe you is the most common cause of a first-year cash problem, and it is entirely fixable with a system.

Entity and structure

Sole proprietor, LLC, S corporation or corporation. The right answer depends on what you expect to earn, whether you will have employees, and what you want to do with the profit. The wrong answer costs you money every year, quietly.

Payroll

If you have employees, employment tax has to be right from the first run. It is the one area where falling behind stops being a business debt and becomes a personal one. That is not a theoretical risk. It is the most common serious problem I see on the resolution side of this practice, and there is a whole page on it at Trust Fund Recovery Penalty.

Internal controls

There is more to an accountant than most people think. One useful part is making sure no single person can both spend the money and account for it. Employee theft in small businesses is almost always in a business where the owner was too busy to look and trusted somebody completely. Both of those are normal, which is exactly why the controls exist.

If you are about to send your first invoice, come in first. It is a much shorter conversation than the one afterwards.

What you get out of it

You can look at the business month to month and know where it stands. Track the income, track the expenses, see whether the thing is viable. That is what lets you make a decision in July rather than discovering a problem the following April, when your options have narrowed to whatever is left.

It also means that when the return comes to be prepared, it gets prepared from books somebody understands rather than from a file that arrives in February with questions attached. See tax return preparation for that side of it.

Already running and behind on it

If you are a year or two in and the books have got away from you, that is a normal place to be and it is fixable. Come in, let us take care of the returns, and get the record keeping onto a footing you can actually maintain.

Common questions

Should I come in before or after I start the business?

Before, if you can. The choices made in the first few weeks about entity type, payroll and record keeping are the expensive ones to unwind later. If you have already started, come in anyway. Fixing it in year one costs a fraction of fixing it in year three.

Should I be an LLC, an S corporation or a sole proprietor?

It depends on what you expect to earn, whether you will have employees, and what you want to do with the profit. There is no answer that is right for everybody, and the wrong one costs real money every year in tax you did not need to pay or filings you did not need to make.

Do I need a bookkeeper or can I do it myself?

Plenty of owners keep their own books perfectly well once somebody has set them up properly. The failure is almost never arithmetic, it is that nobody looks at the result until April. What matters is that the system is right and that you actually review it monthly.

What is the most common first-year mistake you see?

Running the business out of a personal bank account. It makes the bookkeeping much harder, it weakens the separation between you and the company, and it makes every deduction harder to prove if anybody asks.

When do I have to worry about payroll tax?

The moment you have an employee, including yourself if you run an S corporation. Employment tax is the one area where falling behind can land on you personally rather than on the business, so it has to be right from the first payroll.

What about estimated taxes?

If the business makes money and nobody is withholding from you, you will generally need to pay in quarterly. Getting this wrong is the most common reason a first-year owner gets a shock in April, and it is entirely avoidable.