Starting a new business is exciting — but it also comes with a learning curve, especially when it comes to managing your finances. Poor financial tracking is one of the top reasons small businesses struggle. The good news? You don’t need to be an accountant to take control of your numbers.

Here’s a 10-step process to help you set up strong financial habits from day one:

1. Open a Separate Business Bank Account

Step one: separate your personal and business finances. A dedicated business checking account keeps your books clean, simplifies taxes, and helps build business credit.

2. Choose the Right Accounting Method

Decide how you’ll track income and expenses:

Cash basis: Record income when you receive it and expenses when you pay them.
Accrual basis: Record income and expenses when they’re earned or incurred, even if the money hasn’t changed hands.

Most small businesses start with the cash method because it's simpler and easier to manage.

3. Invest in User-Friendly Accounting Software

Gone are the days of shoebox receipts and handwritten ledgers. Tools like QuickBooks, Xero, or free options like Wave help automate your bookkeeping and generate reports at the click of a button. Here at Valerie Russell Bookkeeping we specialize in QuickBooks Online and highly recommend it.

4. Create a Business Budget

A budget acts as your financial roadmap. Estimate your monthly income and expenses so you can make informed decisions and avoid surprises.

5. Track Every Expense

Every dollar matters, especially when you’re just starting out. Track all business-related expenses — from office supplies to advertising — and categorize them for tax deductions later.

6. Monitor Income and Invoices

Make sure you’re logging all income correctly and keeping track of unpaid invoices. Automating payment reminders can improve cash flow and reduce awkward follow-ups.

7. Reconcile Accounts Monthly

Each month, compare your bank statements with your accounting records. This helps you catch errors, fraud, or overlooked transactions before they become big problems.

8. Review Your Key Financial Reports

Make it a habit to review the following:

Profit & Loss Statement (P&L): Are you making a profit?
Cash Flow Statement: Do you have enough cash to run the business?
Balance Sheet: What’s your business worth right now?

These reports give you a snapshot of your financial health and help guide better decisions.

9. Set Aside Money for Taxes

Taxes can sneak up fast. A smart rule of thumb: save 25–30% of your income in a separate account to cover federal, state, and self-employment taxes.

10. Meet With a Pro Every Quarter

Even if you manage your books yourself, schedule quarterly check-ins with a bookkeeper or accountant. They can help catch mistakes early, advise on strategy, and keep you compliant.

Final Thought: Financial Habits Make or Break a Business

Good financial tracking isn’t just about staying organized — it’s about building a business that thrives. Follow these steps early and you’ll set the foundation for confident growth, smarter decisions, and long-term success.

10 Essential Steps to Start Tracking Your Finances as a New Business Owner