I’ve seen this mistake too many times. Making sure to do it correct from the start will save you so much time and potential tax issues.

Keep your business expenses separate from your personal stuff.

That’s it. Really simple. Keeping books and records of your business separate from your personal transactions. It doesn’t matter if you are operating as a sole proprietor, corporation, or LLC. Whatever the

type of formation you have, you want to make your life easier right from the start.

Here is a short checklist for setting up your new business correctly:

  1. Get a separate business bank account. Put your business revenues and expenses in that one bank account. Get it in the company name. There are lots of banking options out there depending on where you live.
  2. Have a business credit card. Ideally, this credit card should be in the name of your company. If you’re a sole proprietor, get a separate credit card and only put business expenses on that one card. Don’t mix them. Often when you’re starting out you can’t get much credit for a new business or corporation. If you are forced to use a card in your personal name, just put only business stuff on it. If you need to get another card, then get it. Generally, you can deduct that credit card fee as a tax deduction. Start with the bank you normally bank with since you have some experience with them. Then look to add a American Express card like these (yes these are affiliate links so you get bonus points if you use them and i get a few points too):

    Amex Canadian Business Platinum: http://amex.ca/share/rOBC2sX7?XLINK=MYCP

    Amex US Business Gold Card: http://refer.amex.us/ROBErC0lQ4?xl=cp33

    Ames US Personal Platinum: http://refer.amex.us/ROBErCvegL?xl=cp33

    Amex is good because they will increase credit limits quickly if you are using it and paying it off. This is key for new corporations that don’t have any credit.

  3. Record mileage correctly. Many countries allow you to deduct mileage for business. Get an app right from the start like MileIQ which will track all your mileage and have a record.
  4. Get invoices and accounts set up in your company name as much as possible. Not everything you purchase can be purchased in your company name, however trying as much as possible to do this can save you issues with tax authorities.
  5. Review the sales tax rules for wherever you live. This can be costly mistakes if you don’t register and collect from the start.
  6. Start your bookkeeping right away. If you can’t afford Quickbooks online which we love, just keep track of your expenses in excel or google doc. Just make sure you keep things tracked and keep receipts. Online receipts – set up a special mail folder. Hard copy receipts – you might want to scan them so you have a copy as they tend to fade over time.

Hopefully that will help you get organized from the start. Spending a little time on simple things can save you headaches later on and save you money.