Time, effort and money must be utilized well, right?
Likewise for any startups.
Being a founder of the company, you can take care of the time and effort but what about the money part?
Head stretching thing and different fears like of
- misuse of fund,
- wrong use
- over spent and so
gives you head spin sometimes.
So today we’re going to show you how to do accounting for startups?
After you know this, you’ll be able to decide whether to do it by yourself or to outsource it?
So let’s see.
Table of Content
- Bookkeeper for Startups: Find out
- Why is accounting vital to startups?
- 10 accounting essentials for startups
Congratulations on launching your own company!
Being an entrepreneur, you run your startup to bring a new product or service to market.
Ultimately to sell it, getting the money in.
For the most part, a start-up’s first funding comes from the company’s founders, that’s you.
You put a lot of effort and money into your product or service.
To have the result as wanted like sales, revenue and so.
And also the money utilization.
So how is it possible to do it effectively?
Bookkeeper for Startups: Find out
For startups, bookkeeping is critical because you might not have much experience in the early stages of operation.
Financial transactions, such as sales, purchases, receipts, and payments, are all recorded in daily bookkeeping.
Journal entries are used to document a company’s financial transactions as part of the accounting.
It’s simply a method of entering financial information into the accounting system.
But not simple when you take care of the aspects of your startup.
Never overlook the importance of accounting and bookkeeping services in the early stages of your operations to save money.
You might be thinking
- Why is that important or why for my business?
- I’m new in the market, why would I need it anyway?
- My transactions are in small numbers?
Answer to that, look what we share.
Why is accounting vital to startups?
A business owner’s primary goal is to make money by selling their product or service.
How will you come to know if your customers pay?
For instance, if you don’t keep track of your expenditures, you won’t be able to deduct them from your income tax.
Ultimately you’ll pay more tax.
Thus, a proper Bookkeeping service and accounting cannot be overlooked, especially for new businesses or for any business.
There are a few things you must accomplish before you begin:
- Decide on the structure of your company.
- Set up a business checking account with a different bank.
- Make sure you’re comfortable with the accounting software you’ve chosen.
- Make sure your firm has a bookkeeping system in place.
You’re ready to begin managing the financial transactions completing these steps for your startup.
Now deeping dive into how to do accounting for your startup
10 accounting essentials for startups:
Even while a manual accounting system can keep track of your company’s finances, it’s far preferable to use an accounting software application.
In today’s market, most basic accounting and bookkeeping programs are geared toward people like you, a small business owner or entrepreneurs.
Additionally, they’re designed to make it simple to keep track of your finances, and most are affordable to fit any budget.
The following financial items must be carefully managed in all situations.
- Bank statements
It’s still vital to reconcile your bank account.
If you don’t reconcile your bank accounts regularly, you’ll miss any possible financial errors that might slip through the cracks if your general ledger is out of sync with your bank account.
- Statements from credit cards
If you don’t keep an eye on your credit card statements, you could be a victim of credit card scams.
Every charge on your credit card statement should have a backup. When several employees are using a company credit card, it’s crucial to keep track of it.
- Payroll System
You’ll need to keep track of payroll even if you only have one employee. This covers it all, from keeping track of employee personnel files to tracking their work-related activities.
Subscribing to a payroll provider is the most efficient approach to handling your payroll.
Maintaining accurate payroll records is your responsibility whether you outsource the task.
What good is it to your business if you don’t get paid for the goods and services you deliver to your customers?
Any accounting software program you choose, invoicing component will also contain accounts receivable tracking.
Keeping track of your invoices and following up on them is essential if you want to be paid.
- Proof of payment
The problem is you mailed them a check three weeks ago.
If you don’t keep physical bills any longer, make sure to have a copy of your bank statements available to check if a check has cleared and provide it to your supplier if it has.
If you don’t use checks, preserve your payment record with the bill if the amount is lost.
- Startup fees
Amortization will be required for any charges that exceed the deductible.
You should ensure that your clients’ payments are correctly tracked, regardless of how they pay you or how much.
It’s essential to keep track of all payments made by customers and attach a record of that payments to their invoices.
You can enter the amount in their record if you’re using a paperless office.
However, it would help if you verified the accuracy of each invoice that is received.
If you pay the wrong bill, you know you paid for no good reason.
Your bills should be tracked monthly to ensure they are paid on time after entering the information into your accounts payable.
Late fees or interest charges may be incurred if they aren’t paid on time.
More minor expenses like parking, postage, printing, and travel should also be recorded.
Keep meticulous records of all business expenses to ensure that your year-end deductions are correct and backed up by paperwork.
- Tax returns
It’s good to keep them for at least three years, though it may be better to retain them for longer.
- Financial statements
Running financial statements takes less than a minute with accounting software, but the information contained in those reports can reveal a great deal about your company.
An accurate general ledger and bank account balance can only be achieved by performing monthly closing financial statements and bank reconciliation.
So these were 10 accounting essentials for startups.
But what if you don’t have enough time to do it all by yourself and want to invest your time on other important tasks?
We got your back to back your accounting.
Many of these services are provided by Key Carrier Management Service, which aids in the expansion and scalability of your company’s operations.
As a company with over a decade of experience in outsourcing services, we remain committed to providing you, our clients, with the most significant possible benefit for your buck.
That is evident in our diversified portfolio.
Entrepreneurs must determine if they want to undertake the grunt work and hire an accountant themselves or hire outside support.
As a business owner, it’s easy to get caught up in the day-to-day operations of your company and forget about the mounting pile of paperwork on your desk.
However, neglecting that pile of documents could cost you more time and effort in the future.
So, all you need to track everything down is including book keeping in your strategy!
You’ll be better able to maintain track of your funds if you manage your bookkeeping and accounting.
This means that you’ll be able to tell if you’re overspending or if you need to raise your sales.
In other words, no matter how you choose to handle your Bookkeeping service, your company will be for success from the start whether you do it yourself or engage a professional bookkeeper or accountant.