When you’re starting up a new business, taking care of your accounts can seem like a daunting task. You’re aware that it’s an extremely important aspect of your business and that getting this part wrong could lead to major problems and the potential failure of your company.
Being organised with your accounts can dramatically reduce the stress that is associated with starting up a new business. Ensuring that your finances – and equally importantly, your taxes – are up date and correct will contribute to your success and help you to plan for the future.
This guide is intended to help to you make the best start towards keeping your accounts in order.
It goes without saying, that efficient accounting is reliant on detailed records and paperwork. When you’re busy and stressed (natural side effects when you’re starting up a new business) it’s startlingly easy to neglect keeping detailed records of your finances.
To begin with, make a record of everything that you think is relevant to your accounts. This may not seem like a time efficient method, but as your experience of keeping your accounts develops, your ability to recognise what needs be recorded will also improve.
Each week, delegate some time to managing your accounts. If you’re a small business, a little over an hour will more than suffice. Setting aside time to focus on your finances will prevent this aspect of your business from morphing into a monster that’s too difficult to manage.
Be realistic about your budget and labour costs
Being realistic about how much things are going to cost is not the same as being pessimistic about the success of your business. It’s unnecessary to over-budget for absolutely everything; in fact, this could even be counterproductive, as it’ll seem as if your business has insufficient funds to go in the direction you want. However, creating a budget that’s accurate is the surest way of ensuring that guaranteeing your business doesn’t end up in the red.
Whether you employ a team of 10 or you’re the only person on the payroll, your biggest expenditure is likely to be labour. Establishing rates of pay is not the best part of running your own business. On the contrary, it can make you feel as if you’re being unfair, by not rewarding your employees for their hard work and dedication.
However, establishing wages that aren’t in keeping with the scale and profitability of your business can only end in disaster. Whenyour business is just getting off the ground, establishing wages that are not going to threaten the financial standing of your company is a good move. As your company grows more successful, the opportunity to reward your employees with incentives and bonuses will definitely come around.
For readers in the US, consulting the United States Department of Labour will ensure that your wages meet the necessary legal requirements. Similarly, UK readers can obtain relevant information from Department of Working, Jobs and Pension.
It’s easy to be confused by the different accounting options available. Online versus offline. Electronic versus time with a real accountant.
And when as much importance is placed on ensuring that your accounts are taken care of with efficiency and accuracy, choosing the right option for you is important.
Online accounting options avoid the restrictions and limitations associated with using desktop software. Using online software allows you to work on your finances from any location and any computer. Furthermore, this is a secure way of sharing information between you, other employees and your business’s accountant, as opposed to sending information by email or in the post.
Offline accounting has the benefit of drawing some real knowledge from someone who has been in the industry for some time. They can personalise your business plan and provide the right guide for your business to make steps in the right direction and make progress. Some of the best accountants like Peak PA Private Accountants can provide pretty much every one of your business accounting and financial needs.
Accounting and finances may not be the most rewarding or exciting aspect of starting your own business. Nevertheless, dedicating the time and effort to ensuring that your finances are accurate and well-maintained will undoubtedly contribute to the success of your venture.