Accounting Help For Startups and Entrepreneurs

Owners of emerging businesses aren’t naïve. However, with so many demands on your time, staying focused on accounting needs may be difficult. Maybe you’ll do it yourself with handwritten ledgers or off-the-shelf software. Or perhaps you’ll hire a bookkeeper or outsourced accounting services for startups to enter the data and organize it.

And depending on how close you are to year-end, you’ll realize that it makes sense to plan ahead for filing your first tax return, rather than dealing with it after the fact… And, while you’re at it, maybe a local accountant could also help you plan other aspects of your business?

Alternatively, it is smart for startup owners to plan an accounting strategy right from the beginning.

Why Is Accounting Important for the Startup of a Business?

  • An accounting process allows business owners to see at a glance where it stands and how it is performing financially
  • It allows the businesses to understand their past activity and where they currently stand in order to plan for the future
  • Accounting allows startup businesses to keep track of their debts and receivables for goods produced and services rendered
  • Small-business and startup owners use financial accounting to communicate information externally to people and organizations that use the financial information of a company such as banks, the IRS, suppliers, creditors, future investors, and leasing companies
  • Accounting is also used to share company strengths and weaknesses with employees
  • Small-business owners may use financial accounting information to analyze competitors and evaluate investment opportunities

Here are 4 steps startups should take if they need help with startup accounting.

1.Organize Your Records

Staying organized is critical to efficient and accurate bookkeeping. Organize your bookkeeping records by deciding what to keep, and how to find information quickly when you need it. Everything you do in your business generates paperwork that can easily become overwhelming if you don’t keep it under control. Many startups and small business owners use these four methods to  manage their accounting:

File folders: these are used for filing invoices, payment, and contact information about vendors; information about individual employees, such as payroll-related forms and data; and information about individual customer accounts.

Three-ring binders: Your Chart of Accounts, General Ledger, and Journals are usually kept in three-ring binders. Even if you do use a computerized accounting system, it’s a good idea to keep a copy of this for the month most recently closed and the current month in hard copy in case your computer system goes down and you need to quickly check information.

Expandable files: These types of files are good for managing outstanding bills and vendor activity. You can get alphabetical expandable files for managing pending vendor invoices and purchase orders. You can use 30-day and 12-month expandable files for managing outstanding bills. As bills come in you can place them in the 12-month file for the month they are due. Then move the current month’s bills to the 30-day file by the day they are due. You may be able to avoid using these files if you are using a computerized bookkeeping system and set up the bill pay reminder system in your accounting program.

Media for storing backup computer data: If you are keeping the books on the computer, be certain you make at least one backup copy of all your data daily and store it in a safe place — a place where the data won’t be destroyed if there is a fire. A good alternative could be a small fire safe if your business does not have a built-in safe.

2. Choose a Software that Works Best For Your Business

Business accounting software can be the source of all this information. But finding the best accounting software program for your business can be a challenge, with an explosion of shrink-wrapped software products and online application offerings. In order to choose a business accounting software program, you need to understand some business accounting basics, take a good look at your business and its accounting needs, and assess the products available today.

The first step you need to take in choosing accounting software for your business is to undertake a good needs analysis, which will address both managerial and financial needs. It should be broad, exploring both obvious questions and ones that really make you think. Take your time with this important step, since the last thing you want is to have to repeat this process within the next two years. If you experience unexpected growth that forces an upgrade, terrific, but good planning at this stage can help you avoid having to change software too soon.

3. Plan a Business and Tax Strategy

Tax planning is the analysis of a financial situation or plan from a tax perspective. The purpose of tax planning is to ensure tax efficiency. Through tax planning, all elements of the financial plan work together in the most tax-efficient manner possible. Tax planning is an essential part of a financial plan. The reduction of tax liability and maximizing the ability to contribute to retirement plans are crucial for success.

4. Hire Outsourced Accounting Services

There are significant benefits to hiring a local accountant in the very early stages of a new business. When you turn to outsourced accounting services, you’re getting financial advice on keeping your business healthy and running.  Because they have had experience with other businesses, they can often provide insight and advice that can help you increase your growth and potential expansion opportunities.  For example, there may be different grant opportunities or tax credits for certain businesses that you may not be aware of but your accountant helped another business file the paperwork.  By having an accountant you get the peace of mind that comes from someone keeping your financial affairs in order and looking out for your interest.

Limitless Investment and Capital Outsourced Accounting Services for Startups in Denver

Outsourcing your accounting function gives you the advantage of having a trusted business partner. We have extensive expertise working with early-stage start-ups. This sort of expertise and experience can be invaluable for your company when it comes to raising funds, financial planning, negotiating term sheets, structuring deals, financial reporting, etc. CALL US TODAY to get started!