Set up a business checking account
Once you’ve established your business as an LLC (or other separate entity), you can get a business checking account in the name of your school. If you like your personal bank, you can likely set up a business account with them relatively easily. Just like your personal account, you’ll want a physical debit card associated with your business account.
You’ll do all your business from that account: tuition money coming in, paychecks going out, rent, and even small expenses. For tax purposes as well as for your own information, it’ll be important to keep careful records of all those transactions. You’ll also want to set up a streamlined and professional way to handle tuition invoices and payroll for your staff.
Some great accounting solutions
If it seems overwhelming, don’t worry. There is software designed for exactly this job. Accounting software is built to keep track of all your expenses. It also lets you design professional invoices to send out to your families, so they can pay with a variety of methods and the money is deposited right to your account. Conveniently, you can also pay your bills from their interface, so it’s a one-stop-shop for the financial aspect of your business. Here are some options:
TADS is a slightly different kind of software. They’ve designed their line of products to be billing systems for schools. While they might not have all the bells and whistles that help you keep track of your expenses, they do a great job of invoicing. TADS also has a product that helps you keep track of applications and admissions, although this isn’t likely to become a problem if your school stays relatively small.
Don’t forget about taxes!
As a business owner, you’ll be responsible for IRS withholding calculations, filings, and payments throughout the year. Fortunately, most accounting software will also handle calculating your taxes. You’ll want to have the right legal paperwork in place from the beginning of your staff’s employment. The IRS has a comprehensive set of information for small businesses on their website, and it wouldn’t hurt to double-check with a tax attorney in your area. If you choose to use an HR management software, like Gusto, they will help manage at least part of your tax filings.
Hard work now pays off later
Whew. That was a lot of nitty gritty financials. The good news is that this is front-loaded. If you take the time to set up (and test!) these systems now, it’ll make for smooth sailing once you get started, when you won’t want to worry about anything but your students.