Today we’re diving into a topic that might not sound flashy—but believe me, it can make or break your business: setting up your accounting systems.
Now, if you’ve recently been laid off and you're looking at this as your moment to build something of your own—maybe your first business—this article is designed especially for you.
We’re going to break down why having an accounting system from day one is essential—not just for compliance, but for clarity, growth, and long-term peace of mind.
So grab a notebook, maybe your favorite coffee—we're about to get real about money,
Why Accounting Systems Matter
Starting a business, especially after being laid off is both bold and empowering. You’re stepping into entrepreneurship with drive—but possibly without a roadmap.
Now, here’s where most new entrepreneurs stumble: they focus on the exciting stuff—branding, social media, websites, products—but they leave the financial systems for “later.”
Let’s be clear: if you’re not tracking your money, you’re flying blind.
Here’s what a strong accounting system provides:
- Financial Clarity – You can’t manage what you don’t measure. If you don’t know what’s coming in or going out, how will you know if you're succeeding?
- Tax Compliance – Uncle Sam doesn’t care that you're just getting started. If you don’t stay on top of taxes, you could end up facing audits or fines later.
- Funding Readiness – Ever thought about applying for a loan or pitching to investors? Without clear financials, you won’t get far.
- Strategic Insight – With accurate data, you’ll know where your business is thriving and where you’re wasting money.
Think of your accounting system as the operating system of your business. Everything else runs on top of it.
Let me tell you about a client of mine who started a consulting business after a layoff.
He landed clients fast—but didn’t track anything. At tax time, he scrambled through emails and bank statements. Not only was it stressful, but he also missed thousands in deductions.
If he’d set up a simple accounting system early on, he could’ve saved time, money, and anxiety.
The Pitfalls to Avoid
Before we dive into how to set things up, let’s talk about what not to do—because mistakes in your early days can snowball.
1. Mixing Personal and Business Finances
This is the #1 rookie mistake. Using the same bank account for groceries and client invoices? That’s a disaster waiting to happen. It muddies your records and can even cause legal trouble if you’re an LLC or corporation. Start fresh—open a business account.
2. Not Tracking Cash Flow
Cash flow is different from profit. You might be making sales, but if your expenses are poorly timed, you could run out of cash and not be able to make payroll—or pay yourself.
3. Skipping Professional Help
Sure, tools like QuickBooks are user-friendly. But at the start, having a 1–2 hour consultation with a CPA or bookkeeper can save you from setting things up wrong. Many offer affordable sessions for startups.
4. Ignoring Automation
In today’s world, manually tracking finances in a spreadsheet just doesn’t cut it. Automating invoicing, expenses, and reconciliation can save you hours each week.
5. Procrastination
I get it—you’re busy. But trust me, waiting 3–6 months to deal with accounting only creates stress. Start early, build a habit, and you’ll thank yourself later.
Here’s a tip: set aside one morning a week to handle financial admin. Block it off in your calendar just like a client meeting. That routine will be a game-changer.
How to Set Up Your Accounting System
Okay, let’s walk through the actual setup process. This might sound technical, but I’ll break it down step by step.
Step 1: Choose Your Accounting Method
- Cash Basis – You record income when you get paid and expenses when you pay them. Simple and often fine for freelancers and sole proprietors.
- Accrual Basis – You record income when it’s earned, not received. Same for expenses. It gives a more accurate picture and is required if your business grows past $25M in revenue or holds inventory.
Talk to a tax professional if you’re unsure—switching methods down the road can be complex.
Step 2: Select Accounting Software
Options include:
- QuickBooks Online – Industry standard, lots of integrations.
- Xero – Clean interface, good for global users.
- Freshbooks – Clean, simple and not high cost.
Look for features like automated bank feeds, invoicing, receipt scanning, and financial reporting.
Step 3: Open a Business Bank Account
Choose a bank that understands small businesses. Online banks often offer better digital tools and lower fees.
Pro tip: Also get a business credit card. This helps build credit and keeps spending separate.
Step 4: Create Your Chart of Accounts
This is basically the list of financial categories you’ll use:
- Revenue
- Cost of Goods Sold (COGS)
- Operating Expenses (software, subscriptions, rent)
- Marketing
- Payroll
- Taxes
Customize this to match your business model. For example, a coach may have categories for “client sessions,” “online courses,” and “tools/subscriptions.”
Step 5: Set Up a Record-Keeping System
Whether it's Google Drive, Dropbox, or a tool like Dext or Hubdoc, store receipts and documents digitally. The IRS requires you to keep records for several years—don't leave that to chance.
Step 6: Schedule Weekly Financial Check-Ins
Every Friday, spend 30 minutes reviewing:
- Bank transactions
- Outstanding invoices
- Upcoming bills
- Budget vs. actuals
This habit alone can prevent cash shortages and ensure smooth operations.
Real-World Benefits
What happens when you do all of this right? You move from chaos to clarity.
Here’s what you gain:
- Peace of Mind – You’re not stressed about tax season, audits, or unpaid bills.
- Informed Decisions – Data lets you pivot when things aren’t working—or double down when they are.
- Professional Image – Clean, on-time invoices and financial organization build client and investor trust.
- Growth Ready – Want to hire your first team member? Apply for a loan? Your accounting system makes that transition possible.
- Higher Profitability – Tracking inefficiencies and expenses helps you cut waste and optimize your margins.
You don’t just “survive” with accounting systems. You scale. You strategize. You win.
What’s the real takeaway here?
Setting up your accounting system isn’t just a checkbox. It’s a decision to treat your business seriously—from day one.
Thanks for reading today’s article on Life By Design 360. If this article helped you understand the critical role accounting plays in launching your business, please subscribe, and share it with someone else on their entrepreneurial journey.
And remember: being laid off isn’t the end—it’s the beginning of something better. Take charge of your business finances now, and you’ll be laying a rock-solid foundation for growth, freedom, and success.
If you've been laid off or in between jobs or just unsatisfied with the job you've got, be sure to go to lifebydesign360.com and subscribe. Each week you'll get important updates on new podcasts that can help you get the job you want now, create a side hack and an income that you can never get fired from and get on the fastest path to retirement success and financial freedom.
And be sure to look out for openings in our LifeByDesign360 Insider Academy and Community. There you’ll find all the coaches, the courses, the resources and an amazing community of people going through what you’re going through, who are utilizing the tools for maximum success.
Owning your own income is very freeing. It takes some work, but if you do it right, and I’ll show you how, there is no better feeling in the world.