Accounting issues and business organization

4 replies
This question is for those Warriors that have a real business
established and running.

Are there accounting issues specifically related to running
an online business? Do you have a recommended software
package?

Also, do you think it's important to establish yourself as an
LLC or Corporation due to legal issues specific to running
an online business?

Thanks for your feedback.
#accounting #business #issues #organization
  • Profile picture of the author Alexa Smith
    Banned
    Originally Posted by IDoTheLegWork View Post

    Are there accounting issues specifically related to running an online business?
    Yes.

    Originally Posted by IDoTheLegWork View Post

    Do you have a recommended software
    package?
    No.

    Originally Posted by IDoTheLegWork View Post

    Also, do you think it's important to establish yourself as an LLC or Corporation due to legal issues specific to running an online business?
    This is a hugely complicated and individual and location-specific question which can be answered for you only by a qualified professional in your jurisdiction, and that's who you should be asking. Nobody here can possibly answer it helpfully for you, when you don't even say which country you live in, let alone anything about your personal tax-position (and this isn't the place to do that), and so on.
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    • Profile picture of the author IDoTheLegWork
      Originally Posted by Alexa Smith View Post

      This is a hugely complicated and individual and location-specific question which can be answered for you only by a qualified professional in your jurisdiction)
      Thanks for the response.

      I realize that a professional will be needed in time. I am just starting
      out, in the U.S., and have some accounting background. I am just
      hoping some of you can give insight to any general issues encountered
      running an online business that may not be found running a brick and
      mortar or general consulting business. And to identify any software
      packages/services that address these issues.

      As for the LLC question, I guess my concern is about liability. Does
      running an online business, in general, open one up to significantly
      higher liability risks?
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  • Profile picture of the author graceemily
    Are you looking something like this? as TALLY. it is an accounting software. you can take a look on it.
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  • Profile picture of the author IMMer1975
    Ditto what Alexa said and with the usual disclaimer that I can't give individual legal advice on a forum and I can only make generic statements:

    IMHO, it is always a good idea to incorporate.

    Online liability absolutely exists, whether its from inadvertent copyright infringement, republishing a defamatory statement or any other "gotcha". A corporation *may* provide you a legal shield.

    In addition, when it comes time to sell your online property such as one website, it is far better to sell it as an asset of your corporation to someone else. That way too, if the buyer decides to sue you for whatever reason, the suit is still against your corporation.

    Of course, to have any real protection from the corporation you need to follow all the proper statutory requirements, avoid commingling funds etc otherwise the corporation becomes useless from a liability perspective.

    Finally, having a corporation and properly maintaining its books will let you enjoy tremendous tax benefits.

    For the small cost of incorporation (in the US), it is my preferred approach. And you only need one corporation and then you treat each online venture as a distinct asset in the portfolio of this corporation.

    Regarding software, I don't see much difference from an accounting perspective that would obviate using something like Quickbooks, that allows you to set up your own chart of accounts to tailor it to your business. There are some sales tax issues to take into account (potentially) and generally you'd need to look at whether you're using an accrual basis or cash basis, but if you can run your books for a brick-and-mortar, you can do so for an online biz.

    HTH
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