Accounting Help for Startup Companies
For many business owners who are just starting up their companies, proper accounting practices and ensuring that bookkeeping is sound is often not give the attention it needs. This can be problematic as becoming distracted by creating a nifty website, choosing the right logo, or hiring staff means your new business can become vulnerable to going under because you don’t understand the numbers.
With bad accounting and bookkeeping practices being one of the most popular reasons that startups go under so quickly, it is vital that you give it the attention it deserves if you want a shot at long-term success.Basic Accounting and Bookkeeping Practices
The Small Business Administration (SBA) created a list of the top reasons why small businesses fail in the US. Of the top 11 reasons why, four of them centered on the financial foundation of the company itself. This means that ensuring your accounting and bookkeeping records are sound is vital towards the survival of your company.
Interestingly enough, the top reason focused on the business owner and entrepreneur who believed they could do all the work themselves. It is this belief of handling everything which leads them to failure as they fall behind in keeping proper accounting and bookkeeping practices. With the attention so focused on starting up a business, keeping an additional eye on the records may seem like a distraction.
The first step in basic accounting and bookkeeping practices is setting aside what is needed to keep track of your accounts. While you may not need an accountant or tax and accounting firm right away, you will need to ensure that your records are kept properly. This may mean hiring an individual or outside firm to do the job or handling it yourself if the company is still growing.
There are a number of excellent accounting software systems on the market, such as QuickBooks, Xero, and Peachtree just to name a few. They can provide you with a good way to keep track of your records in the early days of your company. At the very least, you can keep track of all transactions which will be vital when tax time comes around.
Get a free evaluation today 1-877-788-2937.Why Focus on Keeping Good Records
For most business startups, especially those that begin with one person, you generally do not have to focus on day one about the money you are going to make until it starts coming into your company. It’s when you start making money that hiring an accountant makes sense. Still, it is advisable that you keep good records which means that the initial efforts will start with you.
Taxes: Not keeping good records which puts you in a financial hole affects your business. Not keeping good records that the IRS audits may put you in even more trouble. Keeping proper records is the foundation of your taxes, both personal and business. So, just to stay on the legal side it is advisable that you keep good records.
Tracking Profits: Apart from taxes, the next most important reason to keep good records is to understand how well your business is succeeding. This means accounting for the gross margin and the net margin of the products or services you provide.
Gross margin is the revenue minus the production costs. What’s leftover is the gross margin that will help you see what needs to be changed to increase your profits. The net margin is all sales compared to all expenses, including general overhead, bank fees, rental costs, and so on. What is left over after everything is paid will let you know if your company is making enough profit. Keeping proper accounts means you can find out quickly whether your company is pulling in enough money or not.
Getting Advice: You may not need an accountant on the first day, but for startup companies the day will come when having a tax and accounting firm offering guidance and advice will be necessary. This is because the services they offer will help you tremendously when your company starts to take off.
Get a free evaluation today 1-877-788-2937.How a Tax and Accounting Firm Can Help
Hiring an outside tax and accounting firm can do wonders for your business. Instead of having to struggle with the books yourself, you can hand that over to experts with years of experience in handling such matters. The advantages are considerable when you seek out independent assistance that provides the knowledge, experience, skills, and proper procedures that ensure your books are sound.
In addition, they can provide guidance in areas of getting loans and other methods of making or saving money that can really help you in times of needs. Basically, you will need accounting and bookkeeping services which is vital to the survival of your startup company.
Accounting: Unless you have a degree in accounting or many years of experience, it is best to hire a professional who has focused their career in this field. An accounting does not have to be hired right away and if you plan to keep your business a small one, then a bookkeeper may be all that you need.
However, if you start adding employees to your payroll, have a complex structure to your business such as a limited liability company (LLC), or plan to grow your business considerably, then hiring an accountant is what you need to do.
Bookkeeping: If you are starting up a company, then it is best you hire a bookkeeper right away. A bookkeeper provides you with someone who can track expenses, keep a solid record-keeping system, and provide financial statements when needed. Whether you plan to keep your business small or expand it as much as possible, having a bookkeeper working for you right away means solving many issues before they can begin.
By hiring our tax and accounting firm, you can solve both issues at once. This means having an experienced bookkeeper running your day to day accounts, an accountant overseeing your books, and having your taxes properly prepared. Plus, you get the tax representation needed in case the IRS decides to audit your company.
Get a free evaluation today 1-877-788-2937.