Accounting Advice for Start-ups
If I could give you one piece of accounting advice for your new venture, it would be rather simple: Start early.
Accounting is a vital piece of any new business, but it is often overlooked because people are scared of numbers. You know marketing, you know technology or sales… accounting? Who cares? Doing your books may seem like a overwhelming task, it can be, but the longer you wait the more of a headache the process will be down the line. The earlier you can make accounting a habit, the less transactions pile up and the less you have to try to remember everything that happened in your business over the last weeks/months.
Know your process – Understand internally when the accounting function happens and make that a habit. There are plenty of great software choices to use for the back-bone of your accounting process, the General Ledger. For the accounting newcomers, Xero is a easy to use option.
Know your role – Who prepares what? Who is going to review once complete? Proper accounting function has a preparer and reviewer. If you are going to outsource your accounting, you cannot outsource your responsibility. Even if prepared by an ‘expert’ in the field, you must understand how you business operates from an accounting standpoint in order to be a effective decision maker in business. If you outsource the numbers don’t outsource the knowledge!
If you’re not sure, ask! – Use your resources. FASB guidance isn’t exactly the easiest thing to digest, I personally like AccountingTools when researching a specific topic. It’s also important to research accounting for your specific industry.
Accounting for your new business may seem like an overwhelming task, but the earlier you start the accounting process the more successful you will be. It is much easier to learn accounting when you are dealing with a few transactions rather than a month/year’s worth. Start early and often and you will realize accounting is a necessary piece to understand how your business operates.