How to Set Up a Financial Foundation for Your Business

Starting a business? First of all—congrats! 🎉 You’ve got the vision, the passion, and probably a long to-do list.

But let’s be honest: “set up bookkeeping” probably isn’t the task you’re most excited about.

Still, getting your finances in order early is one of the best things you can do for your business (and your sanity). A solid financial foundation helps you make smarter decisions, stay out of IRS trouble, and sleep better at night.

Let’s walk through the financial basics you actually need when you’re starting out – without the jargon or overwhelm.

1. Open a Dedicated Business Bank Account

You might be tempted to just use your personal account for business stuff. Don’t do this. Mixing business and personal expenses turns your books into a mess – and makes tax time a nightmare. 

Pro Tip:

Even if you’re a sole proprietor, open a separate business checking account and, ideally, a business credit card. This will make tax season way less stressful and keep your books cleaner from the start.

2. Choose the Right Business Structure

Sole prop? LLC? S Corp? Choosing a business structure is a big deal – it affects your taxes, how you pay yourself, and your legal protections.

Not sure which one’s right for you?

That’s normal! It’s worth talking to an attorney or tax pro to choose the structure that best fits your business and financial goals. 

3. Use Bookkeeping Software from Day One

Spreadsheets work – until they don’t. Your business deserves a smarter solution. With QuickBooks Online, you can keep everything organized in one place: income, expenses, invoices, mileage – you name it. Setting up your bookkeeping software & systems from day one will help you be ready for success when your business takes off.

Why it’s worth it:

• It syncs with your bank account (no more copy/pasting)
• Keeps your transactions organized
• Gives you real-time snapshots of how your business is actually doing

4. Create a Simple Budget (Even If You’re Not Making Money Yet)

You don’t have to have it all figured out, but having a basic budget helps you stay grounded and avoid overspending early on. Think of it like a money map – it shows you where you’re headed and helps you steer clear of “how is my account already empty?” moments.

Start simple:

Estimate your startup costs, monthly expenses, and income goals. It doesn’t have to be fancy – just realistic.

5. Keep Good Records (and Save Your Receipts!)

Record keeping isn’t just about staying organized – it’s a legal requirement. You need to track income and expenses to support your tax filings and claim deductions.

Best practices:

• Use apps to save and categorize receipts (like QBO)
• Track mileage if you use your car for business
• Store digital copies of important documents (contracts, licenses, etc.)

6. Set Aside Money for Taxes

Here’s the deal: If you’re making money, you’ll probably owe taxes – and you might need to pay quarterly estimated taxes. Waiting until April to find this out is… not ideal.

Rule of thumb:

Set aside 25–30% of your net income in a separate savings account just for taxes. It’s like a “future you” fund, and future you will be so glad you did.

7. Know When to Ask for Help

You started your business to do what you’re great at – not to categorize expenses and guess at tax rules. If you’re spending hours Googling “How to reconcile QuickBooks?” – it’s time to hire a bookkeeper. You don’t have to do it all yourself.

Signs you’re ready to outsource your bookkeeping:

• You’re spending way too much time managing (or procrastinating!) your books
• You’re behind on your books (by… months)
• You’re unsure if you’re doing things “right”
• You want to grow but don’t trust your financials yet

Your Business Deserves a Solid Financial Foundation

Starting smart with your finances gives you clarity, confidence, and control. At Willmes Accounting, we help new and growing businesses set up smart, streamlined bookkeeping systems – helping you stay organized and on track from day one.

Need help getting set up the right way?

Reach out here – we’d love to help you build a strong financial foundation from day one.