The next thing I recommend is to find your professional support team. This includes an accountant, an insurance professional, a lawyer and a financial/investment person. Now, this will initially sound expensive, but most of these professionals will only charge you for the time they spend working on your stuff.
Here’s why you need an accountant. An accountant will help you set up your accounting basics. They can also tell you how much you should be paying for state and federal taxes. they will tell you what sorts of things you can deduct on your taxes, including depreciation, a home office, mileage on your vehicle etc. They can also “run the numbers” for you about how much you should be putting into savings, in case your new company has some quiet periods, financially, they can figure out exactly how much you can put into your 401K from the employee and the employer if you choose to do that, and if you choose the S-Corp route, how much you should pay yourself as a salary vs. how much you take as a distribution from the company. You’ll also find that when you run your own business you suddenly have to file new tax forms that you are responsible for . Some are due every time you pay salary, some are due quarterly, and some are due yearly. Depending on your level of experience and amount of time you’re willing to spend on paperwork, you can decide to fill it out yourself, but I highly recommend that you get a professional accountant to fill it out the first time and explain what you need to do. I learned this the hard way. When I was on the bench for 6 months, I decided I could figure out my tax forms. So I copied one of my previous quarterly returns. Well, a month later, I suddenly received a bill from the IRS for $12,000. Well, my taxes were paid in full, but since I screwed up the return, I had to spend the next 6 months going back and forth with the IRS trying clear this up without paying major penalties or the $12,000, which I didn’t have to spare at the time. Since then, I gladly pay my accountant to take care of this stuff for me. At a bare minimum, you want to find someone you trust to take care of your yearly tax returns.
I recommend getting a copy of Quickbooks or some other financial software you can use to track your business. This has actually been invaluable for me because each quarter or year end, as long as I make my entries, I can just print off a couple of forms (or if your accountant uses Quickbooks, you can just give them the “accountant’s copy” and they have all of my transactions for the business. Again, I highly recommend getting your accountant to set up all your accounts. Based on your business, you may have different needs, or want to track different expenses. But no matter what your business model is, you can quickly see accounts payable, accounts receivable. You can print off professional invoices and purchase orders. You can track your bank accounts, taxes and expense very easily. You don’t need to be an accountant to use this software. Believe me, I’m a software guy, not an accountant, but it’s pretty easy to update every 2 weeks or a month depending on your volume of transactions. I spend on average 1hr a month doing pretty much everything (and I track my weekly travel expenses in the system). It’s totally worth the effort.
Mike