Accounting for Start-Ups – What are Some Useful Tips to Follow?

Accounting for Start-Ups – What are Some Useful Tips to Follow?

It is easy to navigate every stage of the growth of your startup business when you have the best tax and accounting support. For the owners of start-ups, having a proper and genuine accounting strategy is important in order to steer clear of messy finances and operations. Here are some basic accounting tips that you should know about before setting up a startup business.

Plan expenses before time

Although you have to determine a lot in the first year of establishing your startup business, you can have something resembling a proper budget to keep your finances together. After you have a proper idea, begin to set up a list of the costs you have to take into account – including accounting outsourcing, 3rd party integrations, customer and branding acquisition costs, CRM software, legal advice expenses, co-working / office space costs, server costs, web hosting, salaries etc. It can help you to avoid mixing of your business and personal finances, and get the opportunity to spot your business expenses more easily.

Immediately open up a business account

Once you set up a business, you have to immediately keep the savings and checking accounts of your company from those of your own. It is an important step that will let you keep the expenditure of your small business as direct as possible, which can be particularly advantageous in the tax season. It can also allow more convenience to prospective investors to have an understanding of your financials. The majority of your lenders, VCs or angel investors do not care to take the trouble of sorting out messes involving your business and personal expenses. They are likely to prefer working with a business owner who is more serious with his finances.

Using a proper card, each time

Do not use your credit card for personal expenses to pay for business expenses, and vice versa. Mark each card, and keep it in separate bags to identify which card should be used for paying which expenses. Otherwise, it will be impossible for you to keep track of your startups expenses.

Stop using paper receipts

Try to run a paperless office, where documents, bills etc are digitized and a backup of which is stored on cloud servers. Use digital systems and software apps to manage your receipts. It is easier to organize everything in this way, and you can find things more reliable. There is no need to spend on paper ledgers and invest on separate boxes to keep receipts in. Also ditch old-school paper invoices and opt for online payment and invoicing, which is quicker, can be tracked easily and allows you to make faster payments.

Keep accounting experts around

From new entrepreneurs, you can get plenty of questions related to taxes, accounting etc. You can have your finances in proper order prior to a fundraising. It is a good idea to keep a team of financial experts around, to ensure that your taxes are not entangled in legal problems. With expert accounting professionals around, you can be assured of expert advice.