Starting a new small business is no easy feat. It takes more than just capital and time to get your startup ready for some action. As the business owner, you are hounded by everyday tasks that only you can perform. However, unless you’re a licensed accountant, accounting tasks are most likely out of your expertise.
If you are like most business owners out there and you shudder at the thought of doing those mind-boggling tasks, then hiring an accountant — at the very least a bookkeeper— is your best option.
Accounting can be complex, but having a professional on board can help ease the load off your shoulders. Below is a quick guide to accounting for your startup business.
1. Hire someone with experience.
A startup business needs some extra care considering that it’s still new and is yet to make a noise in the industry. Taking that into account, you will have to take further steps in protecting your assets and making sure that your business is truly ready for growth.
When outsourcing services for your startup, it is imperative to look for someone that has enough experience on his field. The reason for this is because you will have to rely on that person to take the lead on certain business areas — accounting, for example — that is beyond your field of expertise. Look for an experienced accountant that has a good track record in working with startups. Having a competent professional on your side that will handle all your finances is a good morale booster for your startup. An accountant with an excellent portfolio can give you valuable advice and suggestions on where you should cut down the budget and where you can afford to spend more.
2. Leave the finances to professionals.
Hiring an accountant to work for you means you will have to leave them to their jobs without you getting in their way. In other words, trust in your hiring skills and their capabilities to leave the accounting tasks to them, especially if you are not an accounting expert by no means. You already have a lot on your plate as the business owner; you don’t need something “out of your realm,” such as bookkeeping, to add to that pileup.
If you only need a part-time bookkeeper to keep your finances in check, the same rule still applies — leave it to the professional. After all, the reasons you hire them in the first place is to lessen your workload. It just defeats the purpose if you keep on trying to lead the wheel.
3. Organize all things finance related.
The least you can do in the accounting part of your startup is to maintain an organized filing system for all your accounts, documents, tools, and everything associated with your money. Your accountant will need to have complete access to these things, so it is essential to spend some time organizing them. You may introduce your company’s new accountant to your employees and encourage them to ask accounting-related questions if they have any, such as their payroll or taxes.
4. Look for a software that you can easily work with.
You may be happy with a simple spreadsheet for taking notes of your daily business transactions, but your new accountant may want to use a software. If your existing software is efficient enough for your company’s accounting needs, you have to look for one that your accountant can easily work with. A system that allows you to input some notes for your accountant is also a great one. This will keep them updated with whatever changes and suggestions you want to incorporate.
5. Make payroll taxes one of your priorities.
Nowadays, it’s common for businesses to get penalized for violating rules regarding payroll taxes. While paying the right amount of taxes on time is imperative for business owners, many still fail or neglect this important responsibility. When it comes to payroll taxes, you will have to ensure that your accounting software is linked to the payroll. This way, you will be informed of any additional charges in your tax, which you may pay in advance.
6. Do not mix business with pleasure.
One of the most common mistakes many startup business owners make is mixing their work accounts with their personal accounts. They usually have the mindset that all the money is generated from one place anyway so it doesn’t matter which account they will use to pay off expenses and other costs. Grave mistake! Create two separate accounts for business and personal uses, and your accountant will ensure that you get your fair share once tax collection season comes.
Accounting for startup businesses is a delicate matter that should only be handled by professional accountants and bookkeepers, such as those from Balancing Books Bookkeeping. They will ensure that all your accounting and bookkeeping needs are met with quality and accuracy in mind. As a business owner, it is important to remember that you cannot do all things on your own no matter how much you want to. The sooner you realize this, the better it is for your startup business.
Young Upstarts is a business and technology blog that champions new ideas, innovation and entrepreneurship. It focuses on highlighting young people and small businesses, celebrating their vision and role in changing the world with their ideas, products and services.