Critical steps for establishing accounting, applicable registrations and staying compliant when starting a business in Delaware.
Introduction
While the convenience of Delaware can make forming a company straightforward, accounting and tax responsibilities begin as soon as you form the business. This checklist summarizes common accounting and tax tasks for newly formed businesses in Delaware, from registering with state agencies to ongoing bookkeeping and annual filing.
Confirm what type of business you want to operate and incorporate it
Before you handle detailed accounting, determine the legal structure of your business (LLC, corporation, partnership, or sole proprietorship). Forming a business in Delaware typically requires filing formation documents and naming a registered agent. Your chosen structure affects taxation, reporting, and accounting, so keep records of formation dates, member or shareholder agreements, and initial capital contributions.
Obtain a Federal Employer Identification Number (EIN)
Obtain an EIN from the IRS early. An EIN is required to open a business bank account, hire employees, file federal tax forms, and register for certain state programs. Record the date the EIN was assigned for your company records.
Open a business checking account, and keep your personal spending separate
Open a business bank account using your formation documents and EIN. Keeping business and personal accounts separate simplifies accounting, preserves limited liability protections, and reduces complications during tax filing or audits.
Establish bookkeeping and accounting procedures
- Standardize how you track income, expenses, assets, and liabilities.
- Set up a company-specific chart of accounts.
- Choose an accounting method (cash or accrual) and document the choice.
- Perform regular bookkeeping, including recording transactions and reconciling bank statements monthly.
- Maintain up-to-date books to simplify tax filing and provide timely visibility into cash flow and profitability.
Implement Robust Internal Controls
Strong internal controls help reduce the risk of errors and fraud by clearly defining responsibilities for approvals, reconciliations, and asset handling. These controls should be easy to review and flexible enough to grow with your business.
- Segregate duties between bookkeeping, authorization, and custody of assets to reduce risk and improve accountability across financial processes, such as vendor payments and payroll review
- Require independent reconciliation of bank and credit card accounts by someone who does not record transactions; document investigation steps and timelines for discrepancies
- Establish approval limits for different roles and keep a log of approvals with dates, approver names, and reference numbers
- Perform surprise cash counts, vendor statement reconciliations, and sample invoice checks; report findings to leadership with corrective action plans
Automate Repetitive Accounting Tasks
Automating routine accounting tasks saves time and reduces data entry errors, allowing you to focus more on analysis. Cloud-based integrations can help sync transactions and maintain consistency in categorizing recurring expenses.
- Connect bank and credit card feeds to your accounting software to minimize manual input and speed up reconciliation
- Use invoice scanning and OCR tools to capture vendor invoices and reduce paper handling
- Automate recurring billing and subscription charges with scheduled invoices and payment reminders
- Integrate payroll and time tracking systems to maintain accurate labor costing and payroll tax calculations
Plan For Cash Flow Variability
A reliable cash flow plan prepares you for seasonal changes, unexpected expenses, and growth investments. Building and updating forecasts regularly helps you stay in control of your finances.
- Create a 90-day rolling cash forecast with categorized inflows and outflows, updated weekly
- Prioritize collections by offering convenient payment options and clear invoicing terms to shorten days sales outstanding
- Negotiate supplier payment terms and stagger major expenditures to smooth cash requirements
- Maintain a line of credit or short-term financing option and document draw and repayment plans
Establish Document Retention Policies
Clear document retention policies help protect your business during audits and support smooth operations. Well-organized and secure storage makes it easier to retrieve information when needed.
- Classify documents by type and set retention schedules for tax, payroll, contract, and corporate records
- Digitize paper records with secure backups and indexed filing for fast retrieval during audits
- Limit access with role-based permissions and maintain an access log for sensitive documents
- Schedule periodic purges of expired documents and record destruction to maintain compliance
Use Benchmarking And KPIs
Benchmarking financial metrics and tracking KPIs helps you identify trends, detect issues early, and make better business decisions around pricing, hiring, and investments.
- Track gross margin by product or service to understand profitability drivers
- Monitor days sales outstanding and collection effectiveness to improve working capital
- Measure operating cash flow and free cash flow to assess funds available for growth
- Review customer acquisition cost and lifetime value to inform marketing and sales spend