Accounting-For-Startups

Research shows that only about half of all startups survive beyond their fifth year in business. There are many reasons why startups don’t last. One of the most common, though, is accounting and money management issues. It includes things like a lack of cash flow and pricing/cost-related issues. If you want to keep your business up and running beyond the five-year mark, you’ll need to ensure you’re handling your money appropriately.

Accounting For Startups

Read to learn about some of the most common problems that arise when handling accounting for startups. You’ll also learn how to avoid having to deal with them yourself.

1. Poor Record-Keeping:

Startup records

When businesses experience financial difficulties, those difficulties can be traced back to poor record-keeping. If you don’t do a good job of tracking expenses, saving receipts, and paying attention to where your money is going, you will have a hard time ensuring your business stays profitable long-term. To avoid this, ensure you have an iron-clad record-keeping system from day one. Invest in a bookkeeper or bookkeeping software to help you manage your accounts and track your expenses.

2. No Internal Controls:

business's-finance-related-issues
Image by: Max Pixel

It’s not uncommon for employees to wear different hats when you’re running a startup. There’s nothing inherently wrong with this. It can make it harder to track who’s in charge of what, though. This can be a big issue regarding accounting and money management. If you don’t know who’s in charge of accounting, you’ll have a harder time keeping track of what’s working and what’s not.

Ensure you designate someone to handle all your business’s finance-related issues so nothing falls through the cracks.

3. Lack of Tax Knowledge:

Tax Knowledge

Taxes can trip up even the most seasoned businessmen and women, so they’re an issue for startups. Ensure the employee handling accounting thoroughly understands tax laws and knows how to ensure your business isn’t paying too much or too little. You may also need to consider hiring an outside accounting firm to help if no one on your team has this knowledge.

4. Payroll Difficulties:

If you have employees, you’ll need to ensure you stay on top of the payroll. Accurate record-keeping will make the payroll process much easier. You’ll also need to ensure you’re handling basic aspects of payroll, though. For example, don’t forget to make pay stubs and deliver them to your employees on time. If you can’t do this alone, outsource payroll to someone else. It’ll save time and stress later on.

Avoid this Accounting for Startups Problems:

As you can see, there are many problems you might have to face when dealing with accounting for startups. The good news is that it is not too hard to avoid these problems. With some planning and sound money management, you can ensure your business thrives and is profitable long-term.

Do you wish to learn more about business money management? If so, check out the Business section today. You’ll find all kinds of helpful pieces of advice to keep your business afloat.

Jennifer Zilin
Jennifer is an Author and founder of General Queen. A Passionate blogger who has been around the blogging community for over 06+ years and still loves all things related to Wordpress. Love to building websites, writing SEO optimized content, and helping authors self-publishing.

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