Starting a business? Here are six helpful accounting tips

Proper management of finances is critical for any business, as is having a dedicated team or staff to handle said finances. Twenty percent of new companies fail in their first year, and only 30 percent are still in business after ten years. Early steps allow business owners to secure accurate and efficient accounting and prevent disruptions in cash flow that are responsible for many business failures.

It is also crucial for start-ups to have access to reliable and robust reporting. A start-up can establish a solid accounting foundation from day one by following these tips. These same tips can be used by existing businesses as well.

Plan Your Budget

Budgeting is a very crucial part of starting or growing a business. Budgeting involves setting goals and identifying opportunities for growth, all of which fall under the category of keeping the company operating.

Rolling forecasts and initial funding should be referenced frequently in any budget. In addition, rolling forecasts throughout the year can be helpful for finance teams. When businesses regularly check and evaluate their budget throughout the year, everything is kept in check, making budgeting the following year easier.

Maintain accurate business records

Running a business successfully depends on keeping accurate records. Using reliable accounting software like QuickBooks assists in automating many aspects of recordkeeping, but the owner and employees must still enter data accurately.

Invest in a Bookkeeper and Bookkeeping Software

There’s no need for every business owner to be an accounting professional. However, as a start-up company grows, it will reach a point where it needs an experienced bookkeeper to keep its books accurate and up-to-date.

Accounting and bookkeeping can allow a business owner to make sound business decisions. Hiring a full-time bookkeeper can be an excellent investment for new or existing businesses. Companies like Halsey Resources provide a full bookkeeping service option that ensures accurate and efficient bookkeeping, reporting, and more for businesses.

Decide on an accounting method

All new businesses need to choose a method of accounting from the beginning. An accounting system can be either cash-based or accrual-based. Companies mostly use accrual accounting, regulated by Generally Accepted Accounting Principles (GAAP).

Accrual versus cash basis accounting refers to when expenses and revenues are recognized. The cash approach recognizes them much faster than accrual accounting regarding expenses and income. On the other hand, the accrual method emphasizes revenue and costs anticipated in the future. In addition, cash basis accounting focuses on recording transactions when cash changes hands, making it a lot simpler to execute.

Plan future investment

By monitoring expenses and revenue closely in a start-up business can identify when to invest large amounts of money and free up capital or establish credit for covering the costs.

An up-to-date financial reporting system and dashboard make this much more manageable. Starting with a good credit score is also essential.

Reduce the expense of high-cost items

Inventory and labor are two of a business’s most significant expenses. Therefore, consider outsourcing different aspects of your business to reduce labor costs whenever possible. For example, you can reduce a high-cost expense by outsourcing bookkeeping.

Contact Halsey Resources

Halsey Resources is here to help! By utilizing the latest technology, we handle your books and find ways to reduce accounting hassles, increase cash flow, and control costs.

You can find out more about our services and how to get started by contacting us today.