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Going Legit


General Business Discussions

A place to talk about general business discussions.
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  #1  
Old 03-14-2012, 09:31 AM
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element009 element009 is offline
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Default Going Legit

Alright so last year I was not fully legit in terms of reporting my income, sales tax, etc. This year (my second), I would like to make the jump. However, I am a little confused over some of the practical matters involved.

I know I will have to open a bank account in the name of the business, as opposed to taking personal checks or cash payments. What I'm not sure about is how to track my personal income separately from business income. Do I just draw money from my business account as needed and then count that as personal income?

Also, I do not yet have an accountant but I'm researching local guys as we speak. Should I get an accountant now or wait until next year when I do my taxes? Furthermore, I'm looking into getting quickbooks to keep track of all my invoices/payments. Is there any better program than this? Right now I just do all my billing with a Microsoft Word template, but I think I'll need a more organized system of invoices in order to turn the numbers over to my accountant.

Any general advice on the financial side of going legitimate would be appreciated. Thanks.
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  #2  
Old 03-14-2012, 10:32 AM
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Lawn care business tipsLawn Care Business Book
Quote:
I know I will have to open a bank account in the name of the business, as opposed to taking personal checks or cash payments.
To do this you need a DBA or an LLC. You need to register your business. The bank will ask for a copy to prove you are a registered business.

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What I'm not sure about is how to track my personal income separately from business income. Do I just draw money from my business account as needed and then count that as personal income?
We could answer this. But your CPA could answer it much better.

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Also, I do not yet have an accountant but I'm researching local guys as we speak. Should I get an accountant now or wait until next year when I do my taxes?
No, you need one now.

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Furthermore, I'm looking into getting quickbooks to keep track of all my invoices/payments. Is there any better program than this?
Nope, Quickbooks is top dog. Look into "intuit merchant services" It's only $20/mo and you can set your clients up for auto reoccurring payments. Unless of course, you/they are old school and rather print/mail invoices.
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Old 03-14-2012, 02:05 PM
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Quote:
I know I will have to open a bank account in the name of the business, as opposed to taking personal checks or cash payments. What I'm not sure about is how to track my personal income separately from business income. Do I just draw money from my business account as needed and then count that as personal income?
Can you set up a personal and a business account? When you have enough in the business account, move some over to your personal account for your salary. Keep track of what you paid yourself and you are all set.
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Old 03-14-2012, 06:00 PM
deschampsbrothers deschampsbrothers is offline
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Default Good Accountant is the key

Finding a good accountant is the key to taking alot of stress and worries off your hands, paying them a couple hundred dollars to have them file all your tax information and legalization of a business is the best money you can spend. It would take you a couple days to sit down and figure it out on your own, and then it prolly still wont be right so your better off going to work for those days to make money and leave the bs to the professionals to handle. dont just research for an accountant around you just to have one either. ask friends, family or other business owners you know who they use for an accountant and hear them out about them. ask them there pros and cons of doing business with them. another good thing to look for is an accountant who handles other landscaping businesses around you, they tend to have alot more knowledge on all the write offs and depreciation of equipment over time.
As far as managing your money you must open up a business bank account along with a personel account. you must have a DBA or LLC to be able to do this. Another thing you might want to look into is opening an additional account that you can deposit tax money that you collect into, then each time you go in and make a deposit you take your total deposit amount and take the taxes u collected from that and deposit it in the seperate one so u have it when its tax time. alot of people keep all of it together then run into a problem when they have to come up with a couple grand for it. When talking about personal money I went the route of just paying myself a set 200 bucks a week, anything closely related to the business or anything purchased while working then i would use the business account. i found this the easiest way because i have it automatically set up for the withdraw to happen every friday and it is an easy way to keep the things that your not able to write off seperate from the business paperwork. Quickbooks is a nice chunk of change to spend on a computer program but it is worth every cent, nothing matches to it and it will save you time in the long run, set it up right from the beginning and you can make it as simple as transfering your quickbooks files directly to your accountant when it comes tax time. And it is ok to do some work for cash, its just the extent that you take it, best way to try and get a few people to pay you cash is by asking your customers of your smallest properties and ask if they would be interested in making a cash payment once amount for the maintenance provided. Most of them are willing to work with you as long as you provide a quality service.
If you have any other questions feel free to ask, im 21 myelf and just went through all the same work to get everything set straight, its alot of paperwork and bs to get it right but once you do and have a good accountant its much easier to comprehend
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Old 03-14-2012, 06:33 PM
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After you are paid from all your accounts for the week subtract business expenses. After business expenses are all subtracted. The final amount is your take home pay or profit.

Example: You are paid 1700 gross for the week

$1700
-$150 gas & oil
-$30 string
-$50 insurance
-$30 drinks, ice, extra needs, etc
-$40 any other additional needs]
________________________________
$1700
-$300
**********-
$1400 net income

Place the $1400 in the business account til the next paycheck and only withdraw if you have a business need or emergency

then after your next paycheck you can place the $1400 in your personal account and mark it as a profit

Last edited by Wabash Valley Lawn; 03-14-2012 at 06:35 PM.
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Old 03-14-2012, 06:40 PM
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Going Legit?

Step One : Contact a lawyer- he will get you set up in the proper type of business, and all the paper work you need for everything. He will also get you set up with all you legal paperwork (contracts etc). He will also help you figure out what insurance you need, and what you can and cannot legal do in your area.


Step two contact an accountant. He will help you get your books set up, and help you with your taxes, federal state and local if any. He will also help you when it comes to pay the proper workers comp insurance.

Step three, keep incontact with both of the above, stay legal, stay safe, and stay out of both jail and hospital.
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Old 03-14-2012, 08:18 PM
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how much would a lawyer and an accountant cost for a small operation?
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Old 03-15-2012, 02:09 PM
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I would figure it would be at least a few hundred bucks for the lawyer and maybe the same for the accountant which is why I think most new lawn care business owners just start themselves and learn as they go.
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Old 04-02-2012, 03:12 PM
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I can tell you for me in WI, it costed me $595 for a local aty to setup my LLC with all that is needed to do. And $25 to reg. my name/logo with the state so no one can steal my name/logo. $300 or so of that was just for the state of WI filing fees.

As for billing, I am still small. So each month on the 1st I send out my bills for the month. Though some clients I do have just pay me each mow. They are older ones, that don't trust the mail, lol.

I use Square for Credit Card payments and use it also to track all my sales. So its easy and free for the most part. I am sure when I get bigger and have $$ coming in, I will move to book software. Right now I still work my 40 hour job and have about 7 clinets on the lawn side. It's a start!

Good luck!
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