General Financial Advice
Is it important to note Assets, Expenses, and Balance each month, both for company and individually. P.S. I am a web development company owner, so please answer accordingly, and have not much personal experience in accounting and finance.
If it’s just you, set up a Corp and take the S Corp designation. Keep your personal accounts separate from the corporate account. When you get established enough, you need to be on the payroll. Personally I use ADP, which I got at a discount being a PNC customer. You don’t have to use them if you want to do the quarterly reporting, but I personally hate paperwork. But... you don’t have to pay yourself entirely on a payroll either... since as a owner you can give yourself distribution payments from your Corp account. The advantage of taking distribution payments is that they avoid certain payroll taxes... ie you pay less taxes. But here is the catch... as tempting as it is, you can’t pay yourself entirely in distributions if you are a materially involved owner in an s Corp. The IRS looks for that. So, the trick is to strike a reasonable balance between being paid on payroll and take distributions. Usually 50/50 is good. Also look into setting up an accountable plan. As a s Corp owner you can reimburse yourself tax free for home office expenses like a portion of rent, mortgage insurance, cell phone, electric, travel, etc from your corporate account. Just make sure to document it and keep it. But it’s all legal tax advantages to having a Corp.
Two answers, “yes” and “it depends”, based on a number of variables, for example why are keeping the numbers and what do you expect to get out of keeping them current? If you don’t know, it doesn’t matter. As a small biz owner, though, you should not only keep them, but know them and use them proactively... I’m a small biz financial and ops consultant and the #1 thing I see is biz owners not knowing how to run the numbers!
You need to get quickbooks online and also sign up for expensify. And for good measure make sure you have carta for your cap table. Make sure all are integrated then you can either make a loan to the corporation and the corporation can pay the expense or just pay personally, keep receipts and use expensify to send the expense to the corporation. If you are planning on getting VC money you will need to set up an s-corp.
I do the same, but I am not sure what you are asking. If it is “is it important to know your accounts receivable, cash in the bank, and bills you owe”... that would be a yes. If you are running a s Corp, you need to make sure to pay yourself a reasonable payroll... and not just take 100% distribution payments since you are likely materially involved.
Yeah, I think you got the point. I obviously get transparency reports created at the end of each year for government tax requirements. But the Real question was if I have to do it for myself individually for myself. If I take myself on a payroll or something else as i am the owner so all of the profits currently are transferred to my account and then I, personally pay the employees salaries, bonuses, expenses on company payroll like petrol, transportation etc. and the office expenses and utilities etc.
I advice you not to involve your personal account. Do all the transactions from a business account (including pusing salaries). That will separate your personal and business expenses and keeps mean audit clean.