As a small business, you are often faced with many roadblocks. You don’t only face challenges with the administration, marketing, operations, human resources; but also, in accounting. It is unfortunate that many startups struggle with managing their accounts when it is, in fact, a fundamental factor that can make or break your business. So, if you cannot manage your finances and accounts, you must find a way to be settled in this department.
A startup usually must juggle many various tasks. Because of limitations in budget, company owners have to make do with managing a small team taking on different responsibilities. It is a difficult journey to take because people can only juggle so many tasks. There is a limit to what people can multi-task, so a business owner must also be careful of overworking his/her staff. With low productivity comes low sales, and this scenario is what you don’t want to experience.
Most startups fail because of their inability to manage their accounts properly. It is ironic that businesses thrive on the success of their finances, yet most owners do not have the expertise to do the company’s statements. There may be many definitions of success in life, but with business, it is money that defines it. Are you earning enough to cover your expenses, and to get back your capital? Also, how is Return of Investment (ROI) computed? It is when your income equals all your costs and capital. And when you get to this “balancing” point, you know that you have succeeded with your enterprise. It is because you managed to get back all your investments while keeping your business afloat.
As a small business, how do you make sure that your accounting is in check? Would outsourcing your financial tasks to tempCFO help? How do you make sure that you are doing the right thing and you are headed towards the right direction? Here are accounting tips to help your startup thrive:
1. Separate your personal and business accounts
It is a common mistake for many startup owners to meld their personal and business accounts into one. Doing this is wrong for many reasons, and the main reason is you end up lacking the transparency and accountability for what you earn and spend. So, if you want to succeed in your enterprise, make sure that you separate your personal and business accounts. Never allow your personal needs to heed comfort from your company. Even that “one-time” thing is not a good thing to get used to. Be strict on separating the two, and never allow for lending between the two accounts to happen.
2. Keep and record every receipt
It may be time-consuming to do, but make sure that you keep and record every receipt given out and received. Records provide the backbone of accounting, so you do not want to lose out on accountability just by getting lazy with note-taking. Do not think that just because a receipt was used for a small purchase, there is no point in recording it. Every cent counts when it comes to any business, so make sure that you do not forget to account for every transaction that you make in business.