Operating Your Business
A primary step in handling your finances is to set up a business checking account for your consultancy. It is best that you avoid co-mingling your personal finances with your business. Gathering business expenses at tax time will be easier if these accounts are separate.
Secondly, it is important to maintain your records in an organized fashion. At a minimum, prepare individual folders for business receipts, office supply expenses, for each client and etc.
Maintain a log of all client engagements and activities on and off the work site including relevant mileage. For taxes, log all:
- Client-related meals and entertainment
- Professional development (education)
- Professional membership
Establish a record-keeping system that tracks a new client throughout all new project engagements. The use of unique control numbers, client name, and month/date of the inception of the engagement will prove handy.
In order to promote the professional image of your firm in a home business setting, consider using a US Post Office box for mail.
Log your time spent working on all client engagements. Maintain this information in case you are audited.
Ensure quarterly payroll taxes are paid on time to avoid stiff penalties.