1. Good recordkeeping is an essential component of good governance. Here are few easy steps to start:

• Establish Your LLC: If you haven’t yet set up your LLC, take 15 minutes to do so by visiting your state’s Secretary of State website. For businesses in Kansas, you can register your LLC using this link.
• Obtain an Employer Identification Number (EIN): Whether or not you’ve established an LLC, it’s crucial to secure an EIN to avoid sharing your Social Security Number (SSN) on W-9 forms required by clients. Obtaining an EIN online from the IRS takes just a few minutes. Be mindful that the service is only available during operational hours: Monday to Friday, 7 a.m. to 10 p.m. Eastern Standard Time. Apply for your EIN using this link.
• Open a Business Bank Account: Once you have your EIN, open a business bank account and ensure that it is used solely for business transactions. Avoid using this account for personal expenses, such as grocery bills, personal vehicle costs, or household expenses.
• Maintain Clear Records: You can fund your business with personal money or take distributions as needed, but it is essential to maintain accurate records of these transactions. Remember, personal draws from the business are not considered business expenses; they are equity transactions.
• Use a Dedicated Credit Card for Business: If possible, open a business credit card. If that’s not an option, designate one of your personal credit cards exclusively for business expenses. Ensure that this card is used strictly for business-related purchases.
• Consult a Tax Professional About S Corporation Election: Consider speaking with a tax professional to discuss the potential benefits of electing S corporation status for tax purposes. This could result in significant tax savings.
• Avoid Commingling Funds: One of the common reasons the IRS scrutinizes businesses is the commingling of personal and business funds. Keep your finances separate.
• Utilize the IRS Tax Withholding Estimator: To avoid penalties and interest, use the IRS Tax Withholding Estimator to calculate the estimated taxes you need to pay. Access the estimator using this link.
• Keep All Receipts and Invoices: Ensure that you retain all business-related receipts and invoices for accurate recordkeeping and tax purposes.
• Collect W-9s from Vendors: Always obtain W-9 forms from your vendors before issuing payments. Consult with a professional to determine which vendors require 1099 forms.

2. Protect your small business from spam and fraud.

• Protect Your Business from Email Wire Fraud: Never send a wire transfer based on just an email request, even if it looks legitimate. Scammers can fake email addresses or hack into accounts. Always verify the request by calling the person directly using a known phone number. Double-check all details before sending any money. This simple step can save your business from a costly scam.
• Use Strong Passwords: Create strong, unique passwords for all your business accounts, and change them regularly.
• Enable Two-Factor Authentication: Add an extra layer of security by requiring a second form of verification, like a text message code, when logging in.
• Be Careful with Emails: Avoid clicking on links or downloading attachments from unknown or suspicious emails to prevent phishing attacks.
• Keep Software Updated: Regularly update your computer, software, and security systems to protect against the latest threats.
• Limit Access: Only give employees access to the information and systems they need for their job. This reduces the risk of internal fraud.
• Use Spam Filters: Set up email spam filters to block unwanted and potentially harmful messages.
• Monitor Accounts: Regularly check your bank and business accounts for any unusual activity.
• Educate Your Team: Train your employees on how to recognize and avoid scams and fraudulent activities.

3. Other good examples of governance include:

1. Clear Policies and Procedures: Establishing and enforcing well-documented policies that guide decision-making, operations, and ethical behavior within the organization.
2. Transparency: Open communication and accessible information for stakeholders, including accurate financial reporting and disclosure of key decisions.
3. Strong Leadership and Accountability: Leaders who are responsible, ethical, and answerable for their actions, with clear lines of accountability throughout the organization.
4. Effective Risk Management: Identifying, assessing, and mitigating risks proactively to protect the organization’s interests.
5. Stakeholder Engagement: Actively involving stakeholders, including employees, customers, and investors, in the decision-making process and considering their interests.
6. Compliance with Laws and Regulations: Ensuring the organization adheres to all relevant legal requirements and industry standards.
7. Diversity and Inclusion: Promoting a culture that values diverse perspectives and includes all voices in governance and decision-making processes.
8. Sustainability and Social Responsibility: Integrating sustainable practices and ethical considerations into the organization’s strategy and operations.