THE NEXT STEP
The next step in forming your foundation is opening a bank account and creating your “Books and Records”.
To open your bank account, you need to go to a local bank with your tax ID # (bring the actual letter from IRS to avoid any mistakes) and the articles of incorporation you received when you formed your entity.
Keep in mind that every state has their own set of rules and the banks then have their own set of policies and procedures when opening an account. IE: In NYS some banks will go online to see that the corporation is in existence, others want an actual copy of the certificate for their files.
To open the account, you will have to deposit money. You have to account for that money in your “Books and Records.”
“Books and Records” is what the IRS requires every business to maintain. This is a link to IRS publication 583 “Starting a Business and Keeping Records”
That’s not all! Not only does the IRS require it, so does every other federal, state and city agency that has jurisdiction over your business as well as your bank, insurance company, partners, investors and your soon to be ex-spouses divorce lawyer.
A stable bookkeeping system that produces reliable, timely financial reports and matches what’s reported on your tax return is what every business is required to maintain.
WARNING!!! QuickBooks is not a bookkeeping system. QuickBooks is a tool that can be used in your bookkeeping system, but in no way, shape or form should it be considered your bookkeeping system.
Setting up a reliable, accurate and efficient bookkeeping system varies for every business. Believe it or not, IRS does not require any specific form of bookkeeping, only that your books and records “Clearly reflect the income and deductions recorded on your tax returns.” Moreover, therein lies most, if not all new business owners point of frustration. Unfortunately, many CPA’s, Enrolled Agents and other tax preparers don’t educate their clients on how to keep their books. They might tell them what records to keep but leave out exactly how.
In my Amazon Best Seller Your Amazing Itty Bitty Bookkeeping Book: Organize Your Books & Records for Business Success I tell you exactly how to keep books and records in 15 easy steps.
You can always schedule a free chat with me to discuss your specific situation.
Once you have your bookkeeping system in place you can begin to Build it.