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Accounting for startups – 5 essential things you should know

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Accounting for startups – 5 essential things you should know

You’ve transformed your great idea into a business that makes money, and you’ve started selling things. Now you’re thinking about how to take your company to the next level. You probably want to concentrate on obtaining clients and generating money as the proprietor of a new firm. These things are important to the success of your business, but so are your finances and understanding accounting for startups.

Accounting for startups is especially important because if you want to keep accurate financial records, you need to set up a good accounting system. Read on to find out more about what you need to know.

Know The Law

The first and most important thing you should do when trying to accounting for startups and how to manage the finances of your new business is to find out what laws apply to it. You’ll never learn how to keep good books if you don’t know why they’re so important.

You should be able to answer questions like:

When do I have to file my taxes?

What information do you need to keep track of your income and costs?

How long should invoice copies be kept?

Keep Personal And Business Expenses Apart

Just like it’s important to keep your business and personal life separate, it’s also important to keep your personal and business expenses separate. If you can’t see each part of your startup’s cash flow separately, it’s hard to keep track of it.

If you haven’t done so already, open a new, separate, bank account for your business.

Keep An Eye On Expenses

Keeping an eye on costs is the most common problem that any entrepreneur faces when it comes to accounting for startups. Simple costs like team lunches and office supplies can also make you spend all your money before you realise it.

You can’t run a business well if you don’t keep track of your expenses.

Pay for your expenses with a business credit/Debit card and link it to good accounting software. This way, you won’t have to sort through a bundle of receipts in your bag.

In addition to making it easy to keep track of your spending, using a credit card lets you earn rewards and points. Keeping good records of your expenses can help you save money if you keep good books.

Accurately Track Salary

Most of your business’s budget will go toward paying your employees. In a startup, people often work extra hours and on holidays to meet tight deadlines, so it’s also important to pay them correctly.

It can be hard to keep track of your employees’ leaves and overtime hours by hand. You should be able to link your accounting software to a biometric attendance monitoring system so that you can keep track of your employees’ hours and pay. Payroll taxes are different from income taxes, so your accountant can help you figure them out as well.

Hire An Expert

You may be able to manage your startup’s financial affairs well with some practice and education. Still, when it grows, you will not be able to match the competence of someone with a professional accounting degree.

An accountant’s services, even if just for a few hours each week or month, can have a significant impact. This person, like the experts at AccounTax Zone, will assist you in filing your taxes correctly by informing you of any possible costs and saving you money.

It’s a good idea to select an accountant who can eventually serve as your go-to source for financial advice. The financial data they have access to will allow them to provide you valuable insight into how you can meet your immediate and long-term company objectives.