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Whether you’ve been running your small business for a decade, or you’re just now getting the ball rolling, determining how to organize your finances is an ongoing concern for all SMBs and freelancers. Our handy checklist will help you decide where you are now, where you’d like to go, and how, exactly, to get there.

1. Is it time to grow?

When you’re first starting out, the only person worrying about how to organize your finances may be you. While many small businesses begin as sole proprietorships, it may be time to consider becoming an LLC or some other form of corporation.

Incorporating yourself protects your personal assets if your business should fail. It also may provide additional tax breaks that you don’t qualify for as an individual. Many banks and other lenders won’t grant small business owners a business account unless they are a legal business entity.

Speaking of which, it may also be time to get yourself an Employer Identification Number, or EIN. An EIN is a free tax number assigned to your business by the IRS. It’s helpful for separating business income from personal income, opening business bank accounts, and creating retirement plans for yourself and your employees. To get your own EIN from the IRS, visit

2. Keep ‘em Separated

Still using a single checking account for your business and personal life? When determining how to organize your business finances, opening a separate business checking and savings account should be first on your list after incorporating yourself. Once you’ve established yourself as an LLC or other entity and obtained an EIC, open a separate checking and savings account for your small business.

You may also want to get a credit card that is solely for business expenses. Separating business income and expenditures from personal finances will make organization much easier come tax time, and many business credit cards offer rewards like cash back and free flights.

3. Does everyone have their head in the cloud?

Are you, your partners and employees all tracking expenses and invoices using the same cloud-based application? When wondering how to organize the many daily transactions of multiple parties, consider a web-based platform like Freshbooks for invoicing, or Shoeboxed for creating expense reports.

Freshbooks has accounting functions that allow users to track time and expenses, invoice clients, make secure payments through Paypal, and even manage projects. In addition to the ability to generate expense reports, Shoeboxed lets you create digital receipts with your desktop scanner, smartphone, or by mailing hard copy receipts to us in a prepaid envelope. Everyone will be able to utilize the mobile apps that come with these programs, making organization and consistency a cinch, no matter where you are.

4. Have you consulted an expert lately?

Whether you have an in-house accounting department, an on-call CPA, or just wear that hat (and many others) yourself, it’s always good to get a second opinion. An accountant who specializes in small businesses can show you how to organize your finances for maximum deductions, will have tips and tricks you hadn’t considered, and may be able to save you money in ways you never imagined. Make the most of your write offs while giving your accountant (or yourself) time to work on everything else on their plate.

5. Self-employed retirement plans

Just like business checking and savings accounts, there are retirement accounts geared toward small business owners and self-employed individuals. These plans may have specialized benefits for small businesses, like tax deferrals and higher contribution limits.

Think you can’t afford a retirement plan? Consider a SIMPLE IRA. This plan lets you match your employees’ contributions to their retirement fund, but it caps how much they can contribute per year. This plan is also exempt from the reporting required by the IRS for 401(k) plans.


What are your tips for organizing your SMB finances?