Written By Ramona Cedeno, CPA, CFP, CGMA, CEO & Founder of FiBrick
The marketplace may be riddled with startup business owners, but the venture is always worth pursuing. Small business owners come from various backgrounds, be it a digital painter, chef, woodworker, ceramicist, and even a baker. They’re masters of their own field, and they enter the business world in the hopes of creating a brand that’s unique and valuable.
Although highly competent, most new entrepreneurs are not experienced accountants or bookkeepers. They worry about managing their finances, as all business ventures require the need to stay on top of numbers.
Although the lack of proper numerical experiences can be forgivable, it’s important to look for ways to properly track and manage all financial transactions. It’s one of the most critical hats business owners need to wear, especially since you’ll likely be running on limited resources.
Failure to keep up with records and transactions can quickly lead to a failed business. To ensure business success, keep these accounting tips in mind:
Continuously research laws and regulations that apply to business
Knowing the law is a crucial step towards proper financial management, especially when it comes to startup businesses. You’ll want to ensure that you are fully equipped with extensive knowledge on what should be done, and why it’s significant. Doing so will also keep you up to date during the tax season, avoiding any conflict that may arise.
Make sure you know how to answer the following fundamental questions:
Taxes: When and how should my taxes be filed?
Records: What should be written down under revenue and expenses?
Invoices: What receipts should I be keeping? How long should I save them?
Track your expenses carefully
Running a startup fills you with excitement and exhilaration, so it can be easy to get carried away. As an entrepreneur running a startup, you must carefully keep track of your expenses. You will be tempted to constantly go out for team lunches and purchase office supplies, only to realize that you’ve used up your budget.
Operating with a carefree attitude will leave your business scrambling to find clients, desperate to keep the cash flow going. It’s also possible to end up in debt, so make sure to track your expenses accordingly. Consider getting a business credit card for any expenses, as well as a designated notebook to store your receipts.
Never forget to save
Listening to old adages may seem rather cliche, but the term “it’s better safe than sorry” holds true for the business world. Most startup businesses fail due to improper cash flow management, especially since resources are low.
Problems with cash flow usually happen due to late payments or low seasons, but all those can affect your business growth and development. To ensure that your business survives through challenging times, have enough savings to get you back on track. You must have enough cash flow reserve for at least three months—the more, the better.
The Bottom Line
A startup venture can be an exciting experience, especially if your product or service is promising. A huge chunk of your success relies on a thorough business plan, but the other bigger chunk will rely on your operations, as well as your capability of long-term profitability.
Ensuring steady business growth is never easy, as you will be compelled to constantly innovate, learn, and above all, keep your transactions in check. As you get ready for your launch, keep these quick and easy accounting tips in mind. With more experience and learning, you’ll set your small business up for success.
If you wish to hire an accountant for your startup company, FiBrick has you covered. We offer you a suite of services best suited to help you succeed. We integrate optimal service, state-of-the-art automation, and industry expertise, topped with a spoonful of passion to ensure business success. Let’s talk growth—reach out to us today.
~Ramona Cedeno, CPA
We hope you’ll join us on the evening of WEDNESDAY, JANUARY 27th at 7:00pm via Zoom, for an engaging conversation! At: https://bizofwe-virtual.eventbrite.com We look forward to connecting with you there!
At The Business of WE community, we host events on a weekly basis, EVERY WEDNESDAY at 7:00pm (est), via Zoom to connect our sisterhood of supportive women. What we have noticed is that the ones who “Show Up”, are the ones that are actually experiencing results in their business. Consequently, they are also a group of women whom we engage with the most. To learn more about how you can be a part of this unique group of phenomenal women, check out an upcoming event HERE!
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- 3 Accounting Tips Every Business Owner Should Know - January 1, 2021