One of the most important things to get a handle on early in your startup's life is finances. Making a few errors in the beginning of your business can lead to poor practices and accumulated losses down the road. Here are some ways to manage your finances as an early startup.
Use Technology When You Can
There are several handy online tools to help businesses keep track of their spending. Be sure that you choose a bank that offers mobile and online banking. Some banks also provide you with tools to categorize your spending into different accounts, such as payroll, equipment costs, and rent. If your bank doesn't give you these tools, you might consider looking for an app that can hook into your bank account and pool the data into spending charts and other handy tools.
At the same time, using great accounting software is crucial to keeping your records clean. Different bookkeepers and accountants prefer different software, but make sure to look for options that are compatible with each other and with your project management systems, if you have any. Re-entering data multiple times can lead to errors and confusion.
Plan Out Your Road Map
Be sure to also manage your current finances as well as your projected ones. Create a budget for future staff and overhead so that these expenses don't sneak up on you. If you are unsure on how to benchmark these expenses, speak with a knowledgeable accountant with experience in your industry.
Use Outsourcing to Your Advantage
Finally, you can save yourself a lot of time and effort by outsourcing some of your financial work to specialists. For instance, you may want to hire a bookkeeper to keep accurate records of your financial transactions. You'll be able to verify your work with a knowledgeable outside source this way and make sure your filing system is set up correctly from the start.
The way you set up your books can vary based on the types of audits you're preparing for—for instance, do you expect to be liable only for tax audits, or do you have another government or outside agency keeping track of your finances? In addition to bookkeepers, you may want to hire a management accounting professional to outsource financial reporting and analysis; you'll be sure that you have the most accurate numbers to base important financial decisions around. By hiring help when you need it, you'll help yourself to avoid beginning financial mistakes that some startups make.
For more information, contact a company like Dale K. Cline, CPA PLLC.
Share6 April 2016
A few months ago, I realized that I was flat broke. I didn't have the money to pay my rent, and I knew that my parents didn't have a dime to lend me. I was in a bad situation, so I decided to start shopping around for a financial services company who might be able to issue me a short-term loan. To my surprise, I was able to find an amazing business to work with that offered low interest rates and acceptable policies. This blog is for anyone out there who has been in a similar situation, and who needs to understand written contracts a little better.
