Week one: the bank account
Open a business bank account in the company's exact legal name as soon as you have the EIN and formation documents. Banks usually ask for the certificate of formation or incorporation, the EIN letter, the operating agreement or bylaws, identification for each owner and signer, and sometimes a board resolution authorizing the account.
Decide who may sign and who may approve payments, and set that up on day one. Move every business dollar through this account. The single most useful bookkeeping habit for a new company is never mixing personal and business money.
Week two: cards and the accounting file
Issue company cards only to people who need them, with limits, and agree on rules for what they may be used for. A card tied to one person's name and one purpose is easy to reconcile. Reimburse expenses paid personally through a documented process.
Set up accounting software with a simple chart of accounts. Connect the bank and card feeds, and decide whether to use cash or accrual accounting. If you expect investors, choose accrual from the start.
Choose the fiscal year
Most companies use the calendar year, which keeps things simple. A fiscal year ending in another month can suit a seasonal business, but a corporation that wants a different year end needs to set it up properly, and it changes when returns and payroll forms are due. Choose with your tax advisor before the first return, because changing later takes an election.
Before the first customer pays
A pre-revenue company still needs good records. Capture every expense with a receipt and a purpose. Keep founder-paid costs separate and documented. Save contracts and agreements.
Before you send the first invoice, decide how you will bill and collect: the invoice template, the payment methods, the terms, and the account the money goes to. Set up sales tax if you will sell taxable goods or services, and a way to track the invoice until it is paid. Each of these is quick before the first sale and harder to retrofit.
Hand off before it breaks
As soon as someone other than the founder starts handling money, write down the routines that live in the founder's head: who approves bills, when payroll runs, where documents live, and how the month is closed. A one-page document is enough. It lets finance continue if a person is out.
Frequently asked questions
Do I need a business credit card right away?
Not necessarily. A card helps separate spending and builds a record, but it needs rules. Start with one and a clear policy.
When should I start keeping real books?
From the first dollar. Cleaning up a year of mixed transactions costs more than keeping them right from the start.
Can I change my fiscal year later?
Often yes, but it generally requires filing and has tax consequences. Decide early.