It is not an understatement to say that proper accounting is crucial to the success of a startup. Keeping accurate records of your company’s finances is essential to get a sense of where the business is heading while helping to identify growth areas. To help you out, below we share four accounting tips that every startup should heed to ensure your business moves towards its goals and improve its profits.
1. Keep a watchful eye on all expenses
One of the common problems most startups face is keeping track of all their expenses. Every cost adds up, and if you do not label and categorise your expenses carefully, you can quickly run out of money.
To simplify this task and make it more manageable, consider using a business credit card for your purchases when possible. Doing so reduces the number of paper receipts you have to sift through when it comes time to maintain your accounts. In addition, certain business expenses are tax-deductible, which is another incentive for you to keep track of your spending.
2. Set personal and business expenses apart
Proper accounting requires not only accurate records of business transactions, but also complete transparency. Unfortunately, this is not achievable when your personal expenditures are mixed in with the company’s transactions.
It is advisable to apply for a separate bank account and credit card for your business expenses. Not only does this dedicated bank account save you precious time when you are tallying up your business expenses every month, but it also limits your legal exposure to any company debt if you own a limited liability company.
3. Rely on professionals
Small business accounting can be tricky for anyone without a proper financial background. Moreover, time is precious, especially for entrepreneur running their own company. With daily operations to take care of, it can be challenging for business owners to dedicate their time to figure out their company’s finances. Therefore, it is best for you to outsource your bookkeeping needs to an accounting firm.
At Ackenting Group, we provide a suite of accounting services that cater to every business requirement. From financial reporting to affordable corporate accounting services, we can assist your company’s financial needs with our tailored solutions. Our seasoned accountants will be able to provide you with sound advice to ensure you always stay on top of your finances.
4. Keep track of your accounts receivable
A company’s accounts receivable dictates its survival. If there is no income generated, the business cannot continue to operate. Therefore, it is vital for every entrepreneur to review the percentage and total amount of outstanding revenue regularly.
Typically, a company should not have more than 10% to 15% of its account receivables past due. You should always follow up with your clients to ensure they pay you on time. While it is crucial to maintain good relations to guarantee future business, ensure that they do not constantly delay payment.
Conclusion
Finance is the backbone of every business. Therefore, it is paramount for every startup to heed these accounting tips to ensure their company is financially healthy for many years to come.
If you require any assistance on accounting services, feel free to drop us an email at johnwoo@ag-singapore.com or contact us at +65-66358767. At Ackenting Group, we offer a complimentary 30 minutes online consultation for us to better understand your business requirements.
