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Starting Off Right

by | Jan 3, 2026 | Uncategorized

There’s a particular kind of excitement in January. New year, new projects, maybe a new business. I love it. But I’ve also seen enough January optimism turn into April panic to know that how you start the year matters.

Whether you’re launching a business or just trying to get the existing one on better footing, here’s what “starting off right” actually looks like:

  1. Separate business and personal. Completely.
    • Open a business checking account and a business credit card.
    • Run every business expense through those accounts. No exceptions.
    • The IRS calls commingling “piercing the corporate veil,” and it can cost you your liability protection if you’re an LLC or corporation.
  2. Set up your chart of accounts properly.
    • Generic templates are fine, but if you’re in a specialized industry, customize them.
    • A good chart of accounts makes your financial statements actually readable.
  3. Decide how you’re going to pay yourself.
    • Sole proprietor? Owner’s draw.
    • S-Corp? Reasonable salary plus distributions. The IRS has actual guidance on “reasonable compensation” (see Fact Sheet 2008-25).
    • Partnership? Guaranteed payments or distributions. Get this wrong and you’ll pay for it.
  4. Pick your software and stick with it.
    • QuickBooks, Xero, FreshBooks, Wave. They all work. What matters is consistency.
    • Switching platforms mid-year is a nightmare. Choose carefully.
  5. Set a monthly close date.
    • Every month, close the books by a specific date. Mine is the 15th of the following month.
    • If you don’t set a deadline, it won’t happen.
  6. Build in automation from day one.
    • Bank feeds, recurring invoices, automated receipt capture, AI expense categorization. These tools exist and they’re affordable.
    • Starting with clean automation is way easier than retrofitting it two years in.

The businesses that thrive are the ones that treat their finances like a core function, not an afterthought. You don’t need to be a CFO. You do need to know where your money is coming from and where it’s going.

Starting off right costs a little bit of time upfront. Starting off wrong costs you money every single month. I’d rather see you spend a weekend in January than a month of weekends next tax season.