Bookkeeping is one of the most complicated aspects of starting and growing a business. When young entrepreneurs launch their startups they have deep education and expertise in the matters they’ll be dealing with in their company, but - usually - none of them know anything about bookkeeping. And yet, this is the aspect that is most common to any business in the world.
In this article, we’d like to provide you with some tips and common mistakes to avoid to make things easier for any startup entrepreneur.
Bookkeeping for Startups: tips
This way you can keep your personal expenses separate from your business accounts. It’ll be easier to track both aspects of your life - in terms of budgeting - and you’ll be avoiding bad surprises.
Creating a bookkeeping routine means that you pick a moment in your week or month where you are going to register and update all your accounts. Of course, sticking to your routine is just as important as creating it.
The more frequent you do it, the quicker the process will be: if you update your accounts once a week it’ll require 110 minutes; if you do it once a month you’ll need to dedicate an hour or so to it.
When you run a business, you are - of course - required to pay taxes. Even if you don’t take care of filling your tax deduction specifically, you’d still need to know the percentage of deduction you should calculate on your profit. If not, you’d be misunderstanding your accounts by overestimating your profits.
Bookkeeping for Startups: Common Mistakes
When cash comes in it can make it hard for you to keep track of how money comes and goes into your accounts. Make sure you register your cash transactions both when you spend and gain money.
Last but not least, a lot of entrepreneurs avoid asking for professional help in order to save money. However, being accurate with your bookkeeping is too important: if you feel like something can slip out of your hands, hire a professional! It’ll be worth it! Companies like LessAccounting have years of experience offering bookkeeping services for startup companies.
Excel presents itself as an easy and accessible software, but is it really ideal for bookkeeping?
It’s true that Excel is powerful software, but it needs to be set up properly to make it do exactly what you need. When it comes to bookkeeping, you’ll need some automation in a lot of processes: calculating taxes, updating your inventory, and so on… A specific software, built for business bookkeeping is more suitable for the task.
The more detailed and precise you are with your invoices - the ones you make and the ones you need to store - the easier it’ll be to update your accounts and avoid mistakes.