Keep separate bank accounts for your business. Don’t mix personal and business transactions in one bank account. Deposit income promptly in a business bank account. If you need cash for small daily expenses, use petty cash. Avoid using cash to pay for bills or inventory. Pay with check or credit card whenever possible so that you have a record of the purchase. It is too easy to lose receipts and forget about expenses paid with hard cash.
Keep your accounting information filled and summarized following the tax schedule you will file at year-end. That could be schedule C or an LLC or something else, depending on how you structured your business. If you know you will have to report rent or insurance expenses, for example, then you file these expenses separately. Many businesses enter data in an accounting software, classifying them as they are entered. Make sure that the classifications match your business tax return line items.