First-Year Accounting

2 min. read

When you begin to set up your accounting system, you’ll probably want to obtain the service of an accountant or (preferably) a Certified Public Accountant (CPA). This professional will help you get you started correctly so you can avoid problems later with taxes. Here are some topics to discuss:

• Keeping personal and business finances separate. Set up separate checking accounts for personal and business use. It’s also helpful to have separate credit cards, or to mark each credit card statement showing which expenses are for the business and which are personal.
• Cash vs. accrual accounting. Your accountant will probably advise you to select the cash method, which records income when payments are received. Accrual accounting records income when it is earned (when you perform the service and charge the patient). Since you may have some time between charge and collections, you’ll want to record income only when it has actually been collected.