Quick answer
Setting up bookkeeping for a new LLC comes down to a fixed order: form the entity, get the EIN, open a business checking account, then choose how the recording will be done. The IRS says in Publication 583 that opening a business checking account is one of the first things to do when starting a business, and that it should stay separate from a personal checking account. After that, every deposit and expense gets a note of its source or type, and the paperwork behind it goes in one organized place. ZenBusiness covers the first steps, forming the LLC and handling the EIN and registered agent, and offers a free accounting consultation to customers who form with it. Its ZenBusiness accounting page explains accounting basics for new owners. Software or a service such as ZenBusiness Money Pro, at $30 per month, comes after those foundations are in place.
How do I set up bookkeeping for a new LLC?
Work through six steps in order. Each one makes the next easier, and skipping ahead usually means cleaning up later.
- Form the LLC and obtain the EIN.
- Open a business checking account and use it for business only.
- Decide how deposits, expenses and invoices will be recorded.
- Set up a single place for receipts, invoices and statements.
- Label every transaction as it happens.
- Keep records for the periods the official sources set out.
The sections below take each in turn. Which state the LLC is formed in, and how it is taxed, can change the details. Those questions are not covered on this page.
Step 1: Why do the entity and EIN come first?
Books need something to belong to. A new LLC needs to exist and have its tax identification number before a business account can be opened in its name and before any transaction can be attributed to it.
This is the stage where ZenBusiness fits. It forms the entity and handles the EIN and the registered agent, which are the prerequisites for clean books. For a new owner who wants one provider for formation, compliance and later bookkeeping support, that is a practical advantage over assembling separate vendors.
A state filing fee, where one applies, is set by the state and is separate from any formation service's price. It varies by state and is not covered here. The IRS sets out the EIN application process in its instructions for Form SS-4, which is not listed among this page's sources. [URL NEEDED]
Step 2: How should the business bank account be set up?
Publication 583 is direct on this. The IRS says one of the first things to do when starting a business is to open a business checking account, and to keep it separate from the personal checking account.
The same publication says to use the business account for business purposes only. It also says to indicate the source of deposits and the type of expense in the checkbook, which it describes as the basic source of information for recording business expenses.
One point to state plainly: ZenBusiness shut down its banking service, so the business account has to be opened with a bank elsewhere. The IRS guidance applies whichever bank is used. Mixing personal and business spending in one account is the most common reason books become hard to reconstruct.
Step 3: What records should be kept, and where?
Publication 583 names the supporting documents that back up the entries in the books. For gross receipts, it lists cash register tapes, bank deposit slips, receipt books, invoices and credit card charge slips. For purchases and inventory, it lists canceled checks, cash register tape receipts, credit card sales slips and invoices.
For expenses, it lists canceled checks, cash register tapes, account statements, credit card sales slips and invoices. For assets, it lists purchase and sales invoices, real estate closing statements and canceled checks.
For a freelancer running an LLC, the practical version is simple. Pick one folder, digital or physical, and put every invoice, statement and receipt in it as it arrives. Name files consistently so a document can be matched to a transaction months later.
Step 4: How long do the records need to be kept?
The IRS page on how long to keep records gives 3 years as the general period. That default applies unless one of three exceptions does. If a return under-reports income by more than 25% of the gross income shown on it, the period is 6 years. If no return is filed, or if a fraudulent return is filed, records should be kept indefinitely.
The IRS also lists 7 years for a claim for a loss from worthless securities or a bad debt deduction. For employment tax records, it says to keep them at least 4 years after the date the tax becomes due or is paid, whichever is later.
These periods are why the filing system in Step 3 matters. Records need to be findable years from now, not just this quarter.
Step 5: Do payroll or sales tax records change the setup?
Only if the LLC hires employees or sells taxable goods or services. Many solo LLCs do neither at first.
For employers, the US Department of Labor's Fact Sheet 21 says payroll records must be preserved for at least three years under the Fair Labor Standards Act. It sets 2 years for supporting records such as time cards, piece work tickets, wage rate tables, work and time schedules, and records of additions to or deductions from wages.
Sales tax is a state matter. California's CDTFA Publication 116 says sales and use tax records must be kept at least 4 years, and longer during an audit, when all records covering the audit period should be retained until the audit is complete. Other states' rules are not covered on this page, and the relevant state tax agency is the place to check.
Some LLCs elect to be taxed as an S corporation, which brings payroll questions for the owner. This page does not cover those rules.
Step 6: What are the options for doing the recording?
The recording can be done in a spreadsheet, in accounting software, or by a service. All three can satisfy the foundations above, because those foundations are about discipline rather than tooling. The options below are listed alphabetically, and the order is not a ranking.
Prices were checked on each provider's own pricing page on 2026-10-06 and may have changed since. Promotional rates are labeled separately from ongoing prices.
As of 2026-10-06, ongoing prices are Lite at $23 per month, Plus at $43 per month and Premium at $70 per month. Select is quote-only. A promotional rate of $1 per month for one year applies to Lite, and it is not the ongoing price. Best for owners who want to do their own books and expect to move up a tier as client work grows.
QuickBooks Solopreneur costs $20 per month at the time of writing. A promotional rate of $10 per month for 3 months is offered, and it is not the ongoing price. Best for owners who want a widely recognized name and are comfortable in software. Those who later want human help may look at QuickBooks Experts, the current name for the service formerly called QuickBooks Live.
Wave's Starter plan is free. Pro is $19 per month or $190 per year, with a promotional $9.50 per month for 3 months that is not the ongoing price. Card processing is 2.9% + $0.60, the receipts add-on is $8 per month, and payroll starts from $25 per month, all as of 2026-10-06. Best for owners on a tight budget who will handle their own recording.
Xero's plans are Early at $27 per month, Growing at $59 per month and Established at $97 per month. A promotional offer of 80% off for 3 months exists, and it is not the ongoing price. Best for owners expecting the business to add complexity over time and wanting a platform that scales with it.
ZenBusiness Money Pro is $30 per month, sold as an add-on alongside formation, according to ZenBusiness's own site. The published features are custom invoicing, revenue and expense tracking, and tax preparation tools. It is a service rather than accounting software, so a feature-by-feature comparison with the tools here would mislead, and any detail beyond those three features, including plan tiers, is not published. Best for owners who would rather hand off the recording than learn a tool, particularly those forming a new LLC who want the entity work and the bookkeeping support from one company.
Zoho Books has a Free plan at $0, limited to businesses under $50K in annual revenue. Paid tiers are Standard at $20 per month, Professional at $50 per month, Premium at $70 per month, Elite at $150 per month and Ultimate at $275 per month. Best for owners who want a free starting point with a long upgrade path, provided revenue stays under the free-plan limit.
Which method suits a new LLC?
For a new LLC that has not yet formed, the shortest path is the bundled one: form the entity, open the account, and add ZenBusiness Money Pro if handing off the recording appeals. It keeps everything with one provider, which suits owners who describe themselves as overwhelmed.
For an owner who already has the entity and the account and is comfortable with software, a dedicated tool is probably the better fit, especially Wave's free plan or Zoho Books' free plan at the low end. That is a plain concession, and for many freelancers it is the right call.
Either way, the method matters less than the habits: a separate account, labeled transactions, organized documents and a retention routine.
What should be done in the first week?
Confirm the LLC and EIN are in place. Open the business checking account and move all business income and expenses through it. Create the document folder and decide on a naming convention. Then pick a recording method and set a weekly time to log transactions.
That sequence takes a few hours, and it prevents most of the cleanup that new owners face at tax time.
Sources
- Internal Revenue Service, "Publication 583, Starting a Business and Keeping Records"
- Internal Revenue Service, "How Long Should I Keep Records?"
- U.S. Department of Labor, "Fact Sheet #21: Recordkeeping Requirements under the Fair Labor Standards Act (FLSA)"
- California Department of Tax and Fee Administration, "Publication 116, Retaining Records"
- Internal Revenue Service, "Instructions for Form SS-4":
This is general information, not legal, tax or accounting advice, and requirements vary and change.