If you’ve got a startup, you know there’s already several areas of business to cover. Marketing, sales, accounting are all areas you’ll handle, even if you’re not proficient in them.
But how can you manage accounting for startups when you have little to no experience in bookkeeping or financial management for a business? Can you ensure company growth regardless?
Research shows that 9 out of 10 startups fail within their first year. Careful bookkeeping practices can protect your company and ensure safety and prevent this statistic from happening to you.
Check out these tips and see how it’s possible to take your company from startup to success.
1. When It Comes to Accounts, Keep Business and Personal Separate
Many small business owners think they can combine both personal and business accounts without running into a problem. While this might sound easy at first, it can lead to problems further down the line.
If you need to go to an accountant or handle taxes for the next year, you’ll find it difficult to sift through personal versus business income and expenses. Keep things separate from the very beginning and you’ll avoid these issues.
2. Keep On Top of Accounts Receivable and Accounts Payable
You don’t want to be late in paying employees and contractors. Likewise, it’s important to invoice customers and put them on net 30 days if they haven’t paid within that timeframe.
Even if you pay employees by direct deposit, make sure they know how much their pay is and what taxes are withheld. Take advantage of a pay stub generator so all employees know what their income looks like.
Keep careful records for all invoices owed and watch if it’s been over a certain amount of time and money is still owed. Keeping on top of A/R and A/P is critical in avoiding issues related to small business bookkeeping.
3. Write Off Expenses When Doing Accounting for Startups
Many new small business owners don’t realize there are certain items they need to write off if they qualify as business expenses. This can include anything from software, office supplies, furniture, and even cell phone and internet use if it’s for the company.
Because it takes money to run a business, it’s important to understand how write-offs can help protect against business loss when used correctly. Check out this post for more information on having the right small business strategy.
4. Understand the Benefits of Having a Professional Handle Taxes
It’s possible to save time and money by outsourcing taxes to a professional. If you’ve never handled taxes before, it’s possible to miss tax breaks you can take as a new startup.
Professional tax preparers know where to look and how to help your business utilize these benefits to save money. This can ensure you’re not paying more than necessary and that your business is in the correct tax bracket.
Discover More Today
Accounting for startups can seem confusing if you don’t know where to start. By following these tips you can reduce expenses and avoid bookkeeping mistakes that could affect your company down the road.
Looking for more ways to help your business excel? Check out these suggestions on how to improve communication in your company.