Last updated: 8/29/2002; 7:55:36 AM

The FuzzyBlog!
Marketing 101. Consulting 101. PHP Consulting. Random geeky stuff. I Blog Therefore I Am.

Marketing 101: Accounting Tips for Startups

NOTE: If you don't like this story (and the next few) then all I have to say is it's HIS fault where "HIS" is a reader who emailed me this question:


So, the other day, when I IMd you while you were on the phone, I was planning on asking you about running your own business, with a partner.

I'm actually starting a BLANK business (will hit you up to BLANK for us later) with two other folks.

We're going to set up an S-Corp, and I was wondering what experience you have with that idea, and how it works with partners...

Also, if you have any insights into accounting, I'd appreciate them...

perhaps you've written something before that I can read, or have some  links you wouldn't mind passing on.

Much appreciated as always (and btw, we need FuzzyOffice NOW!)  heh


Scott's 5 Tips on Accounting for Startups

NOTE: Accounting is not my best area.  I only got a B or B+ in it in business school.  Loathe it like the plague.  I'd prefer to eat glass.  Or drink Jim Jones brand Koolaid.  I strongly, strongly recommend that you check these with your accountant.  They work for me and my businesses; that's not to say they will work for yours.  Anyway ...

  1. QuickBooks.  Quick Books from Day 1.  Don't screw around with other options.  Quick Books just owns this market.  Quicken Personal & Business edition is also ok.

  2. ADP or Ceridian. Sign up with ADP or Ceridian for payroll FROM DAY 1.  Prevents tons of accounting mistakes.  And forces you to not steal from funds that are reserved for the government but you hold for a quarter at a time depending on your filing approach.

  3. IRS.  Never, ever, ever, ever fu* with the IRS.  Not worth it.  Be fiscally conservative as heck.  Audits suck.

  4. Keep Receipts for EVERYTHING.  5th word: KEEP EVERY SINGLE RECEIPT AND LOG IT INTO QUICKEN (PERSONAL) FROM DAY 1.  Pretty much anything is expensable (extension cords, powerstrips, etc) and you'd be surprised how it adds up.  When I estimated the amount of "misc" expenses I didn't expense back in the day, I came up north of $25,000 ....

  5. You Can 1099 Yourself.  If you aren't doing salaries then treat yourselves like 1099 indep contractors and compensate that way but bear in mind that there are specific tests involved for this that the IRS will hold you to in an audit and THEY CAN BACK TAX YOU ON THIS IF YOU LIE.  Basic test is

    So there you have it.  5 tips on accounting for startups.  Here are 2 bonus! tips!!!:

    6.  Take Your Own Sales Commissions.  All too often owners forget they are real people too and don't take their own commissions.  It's ok to take commissions and actually good since cash is *good* and a *motivator*.

    7.  Don't Forgo Salaries or Document All Loans.  When you start your own business, you often forgo salary or loan the business money.  You'd be surprised how quickly the years pass and it's unclear where the $$$ came from.  And you never do get repaid.

comment []

Copyright 2002 © The FuzzyStuff