Only startups can experience the pressure of building a company from the ground up- developing a business plan, balancing the books, meeting payroll and building a customer base. Most probably, every business hits ragged blotches in business.
Startups – you know what I’m talking about. Maybe an unsuccessful product launch or you might be observing a respite in your customer traffic or you have just lost your key employees or your books are not organized. These kinds of things happen time to time.
But, what you can do of that feeling of despondency that can drain your enthusiasm? For this, you need to have those problem-solving skills to go out the window when you feel mangled. Fortunately, some of these issues have pragmatic solutions. You can make your product more innovative and redesign it, you can change your marketing strategy, and moreover, you can hire professionals for your accounting.
As accounting is the language of business and to be a front-runner in the competitive market it is essential for startups to adopt viable strategies for organizing their books and grow your business.
“You cannot be in control of your business if you don’t know what’s going on with your numbers- you’re essentially flying blind”.
Clemi Hardie, (Founder of Noodle Live)
If you are struggling with your books, here are some key factors that can help you drive the growth of your startup:
Gain knowledge about cash flow – Being a business owner, you need to be multi-tasking for all the aspects incurred in your business and accounting is no exception in this regards. Having a keen knowledge of your business cash flow is essential to evaluate your profits and to analyze the financial position of your business in the market.
By this, it doesn’t mean you need to be an “accountant” but understanding the basics is a must. So learn about cash flow including receivables, payables, and cash in hand, etc., because a control on it from start can help your business in a long-run.
Be top of accounts payable – What are accounts payable? It is basically the outstanding money owed by your company for good and services. Whereas, tracking your invoices on a daily basis is a time-consuming process, largely depending on the type of business you have started. What makes it time-consuming? Well, recording invoice data, invoice number, invoice amount, terms, due date, amount paid, balance and most importantly contact information of each vendor. You will understand in-depth, once you start receiving invoices from your vendors.
Go cashless – We are unceasingly hearing about an evolution towards “go cashless”. You might be thinking that I’m talking about cash payment. Yes, it’s all about transforming your cash payments by embracing digital technologies. If you accept or pay cash for any dealing you have to maintain receipts to protect yourself from government probe as per rule.
Perhaps, it can be easier to avoid transactions, which are not accomplished digitally to ensure a record is kept back automatically through expenditure. This will enable your business to save time and focus more on the core tasks and less on arduous day-to-day operations.
Don’t procrastinate your expenses – Tracking your business expenses should be your major task in accounting. However, it might increase your complexity to analyze the plethora expenses of your business but have to be keener. What all expenses incur? From office rent to supplies to employees’ payroll as well as various employee benefits, you need to track each and everything precisely with a hawk-eye. Besides, if your business is more indulged more in paper invoices, tracking those become time-consuming and difficult. But you need to be thorough and don’t put the work off for the next day; mention tracking expenses in your day-to-day schedule.
Choose the right cloud – Choosing the right cloud accounting software can reduce the amount of time and effort put into managing accounting for your startup business. As cloud-accounting software has a cluster of benefits to upkeep your business. So you can focus more on mounting your business rather than botching your financial insight.
One of the greatest benefits of embracing cloud-based accounting software is you don’t need to be a financial expert to use it. How? In cloud-based accounting software, everything is done online, you just need an internet. You can have real-time view of your financial reports anytime, anywhere. And don’t be jittery about data security because what happens in the cloud stay in the cloud. Some of the top cloud-based accounting software encompass of QuickBooks, NetSuite, Sage, Xero, etc.
Be thorough with payroll – Managing payroll is one of the crucial tasks that require insight of state law for employees, wherever your business is located. Understanding the law and tracking each employee’s salary, leaves, retirement, etc. is way too important that demands excellence and precision.
Furthermore, with accurate payroll data, you can manage your books thoroughly and implement strategies to reduce payroll expenses.
Be ready for the taxman – Taxes are at the vanguard of startups. Being a startup you might face hitches during tax season but having knowledge of taxes with concern to the various law is very important as there are a number of fundamentals, which comes under the tax system.
If we consider federal income tax rates they are reaching new heights every year. Under current U.S. law, the corporate rate is currently 15% on the first $50,000 of taxable income and is predictable 25% tax rate on the next $25000 a whopping 35% tax rate on over $10million of income.
Seek advice when needed – If don’t know when you have to contact a professional accountant can cause havoc for your business. According to researchers, from 9% to 16% startups make deliberate mistakes in their books that lead to a number of penalties during tax season. So it is important to hire a professional accountant.
But being a startup you always face budget constraints and hiring a professional accountant can cost you more. In such scenarios, you choose virtual accounting services for your business and pay them on an hourly basis. This alternative can reduce your accounting stress, save time, money and efforts. You can focus more on the growth of your business rather than making mistakes in the books. Remember, a small leak will sink a great ship and more little expenses can lead your business towards failure.