Starting up a business takes a considerable amount of work from getting a loan to renting or purchasing the property to setting up the equipment needed and hiring employees. Organizing your efforts helps avoid the many issues that will come up in running your company, but perhaps the most important is taking care of the books.
Putting in effective bookkeeping, accounting practices along with money management is crucial to keeping your business afloat, especially in the early months when your finances are the most stressed. Understanding how to properly organize your accounts will help you land the right loans, create the right investments, and make the best-informed decisions to become successful.
Getting StartedWhen you take the first step towards organizing your startup business, you’ll find that it probably requires far more attention that you might have realized. This is because everyone needs to be on the same page and that you need to ensure that everyone is accountable and working in the right direction towards success.
The basic organization of your new company starts with the following areas that need to be focused on for you to succeed;
Everything starts with what your business is about, what you have to work with, and where you want to go which is all contained in your business strategy. You’ll need to know how to translate what is in your head and put it on paper, so that everyone can see the strategies you have chosen and can execute them efficiently.
Next up, all the information flow of your business needs to be organized for maximum efficiency. This means assigning how all information is stored and sent, so that the people who need to know will be informed quickly. Now you can work on the development of the products or services you intend to provide. This means ordering items and equipment, hiring personnel, and ensuring that you have the space to store what is needed to run your business.
The personnel you hire will need to be assigned to their responsibilities and work can begin on starting up your business. This also means assigning individuals and teams of employees to handle what needs to be done in your company. Organizing your inventory is the next step. As goods come in, they will need to be stored, cataloged, and ready for shipment. Now that everything is ready to go, your marketing plan should be created and executed to build up a customer base.
Of all these steps, you will want to ensure that your accounting and bookkeeping practices are ready to go. This means organizing your cash flow, keeping track of all accounts, and preparing the books for tax season.
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Organizing Your Accounting and Bookkeeping PracticesKeep in mind that of the businesses that fail to make it past the first or second year, many collapsed due to poor accounting and bookkeeping practices. This means that while they might have started off well, they were done in by a lack of attention to money coming in, going out, and enough being held back for tax purposes.
What follows are a few tips that will help you properly organize your accounting and bookkeeping, so that it runs as efficiently as possible as your business grows.
Keep Track of Payments: Thanks to the advanced computer technology, there are software programs that can generate receipts and payment statements for your business far faster than the old paper system. From payroll to payments, every dollar can be tracked if you employ the right system from the beginning.
Learn the Basics: No one expects you to become a CPA overnight, but you should be well versed on the basics of accounting and bookkeeping practices. While you may not know as much as a fully licensed accountant, you will have the knowledge to follow basic protocols and identify obvious mistakes right from the start. It’ll also help you hire the right kind of help that will take care of your accounting needs.
Check the Books Frequently: Establish a procedure where you check the books on a regular basis and just before you make any substantial payment. The earlier you catch a mistake, the easier it will be to correct. You’ll find that as your business grows, checking the books daily becomes a smart practice to establish.
Create a Bookkeeping System: It’s important that you establish a bookkeeping system for all expenses and income for your business. The system itself should be accessible to those who handle the books. Plus, it needs to be updated as frequently as possible, so the latest information can be viewed. The good news is that most income, payment, and inventory can be done electronically which automatically enters such items into a computer system.
Establish Sales Tax Procedures: You will need to account for all local and state sales taxes, so incorporating this into your accounts will be vital. This means understanding the current sales tax rate and applying it for every item that you sell within your own state. This also means following all local, state, and federal laws which govern taxes.
Get Experienced Help: The best way to avoid issues with your bookkeeping, accounting, and taxes is to hire an experienced, knowledgeable professional or team of professionals. We provide you the expertise needed to keep your accounts properly aligned, so you can maximize the cash flow of your business. One reason why so many business owners fail in this regard is because they do not know or understand the nuances of good accounting and bookkeeping practices, along with failing to prepare adequately for paying taxes.
There is no substitute for having good accounting and bookkeeping procedures in place with the right professionals in charge. When organizing your startup business, adding us to your team should maximize the chances of success for your company.
Get a free evaluation today at 877-788-2937.
The tax & accounting firm of Mike Habib, EA in Whittier California provides small business bookkeeping and accounting services for business clients throughout Southern California including Norwalk, Santa Fe Springs, Downey, Pico Rivera, Montebello, Hacienda Heights, La Habra Heights, West Covina, La Habra, Brea, Fullerton, Yorba Linda, Cerritos, La Mirada, Lakewood, Anaheim, Santa Ana, Long Beach, Compton, Torrance, Los Angeles, Pasadena, Beverly Hills, Santa Monica and throughout Los Angeles County, Orange County, Corona, San Bernardino County, Riverside County, the Inland Empire, the San Fernando Valley and the San Gabriel Valley.