• New Wave Accountants

Here’s What You Should Know When It Comes to Your Startup

Business owners and startup founders can be many things- a lawyer, a painter, a community organiser, or a skilled business consultant. They are designers, bakers, and woodworkers too. But what they aren't (usually) is an experienced bookkeeper or accountant. But they should be tracking their financial transactions nonetheless.


Whether you're an established business owner or you have a startup, tracking proper financial transactions is necessary.


Accounting: What Makes It So Vital For Startups?


Your primary job as a business owner is to sell services and goods. Initially, that's going to bring on a whole slew of burning questions that must be answered:


  • How can you take year-end tax deductions if you are not tracking your expenses?

  • How will you be able to tell if you have been paid for the materials if you don't record payment in a ledger?

  • How will you know if you have paid your suppliers on time if you are not keeping track of the expenses you pay?


Most of all: are you willing to wait for a call from the bank before realising your account is overdrawn?


Accounting and bookkeeping are necessary for startups precisely because of things like that. Take the following steps before anything else:


1. Decide on what your business structure is with finality

2. Open a bank account separate from your own meant specifically for the business

3. Look for an accounting software application you're alright with using

4. Establish the bookkeeping system of your business


That's the only way financial transactions for your small business can be managed properly.


Accounting For A New Business: How Can It Start Properly?


1. Make sure that business finances are separate from personal accounts, all the way down to bank accounts.

2. Track expenses regularly, including:


  • Bills

  • Financial statements

  • Invoices

  • Proof of payments

  • Receipts

  • Tax returns


3. Have a clear understanding of tax obligations.

4. Evaluate your business' financial health regularly through a balance sheet and other documents.


It is important to start with a well-organised system as you run your business. Your startup business needs good accounting software so that you can get an up-to-date view of its cash flow. This will come in particularly handy when your startup starts to get complex and maintenance gets more and more complicated.


It's Vital To Ask For Help When Necessary


When it comes to financial matters, do you still not understand the difference between writing down your assets and liabilities, and then totalling them up to arrive at your net worth, and creating a financial forecast that's organised in a few simple steps? If the numbers on your financial statement are confusing you, you might consider seeking some help.


If you're starting to spend more time trying to set your books straight and losing a grip on every other aspect of your business, calling in professionals will be ideal.


Conclusion


Business owners, especially those who just got a startup going, need to get a grip on their accounting from the get-go. This way, issues with taxes can be prevented and the expenses can be tracked thoroughly. A good rule of thumb is to ask for professional help when necessary.


In need of accounting advise? Drop New Wave Accounting a line today! We’ve got end-to-end accounting and bookkeeping services, creating tailored solutions for clients.


3 views0 comments

"We take a holistic approach toward each of our business clients. Our clients consistently experience more profit, improved cash flow, and less tax."

Sign up to receive our FREE DOWNLOAD 

"101 Strategies for Business Owners to Save Tax" 

3d cover .png