Accounting Mistakes Startups Can Learn fromby Ryan M. Blogger Plato had said ‘A good decision is based on knowledge and not on numbers’ however in business, it’s the number game. In business if you do not consider the numbers, you may fail badly in your decision. Startups run with tight budget and if they goof up with accounting, survival can be really difficult. Accounting is part of business but for young companies it’s the crucial part of business as financial decisions depend on it.
The business which you started with excitement, slowly fades with erroneous bookkeeping practice. As a startup you may not be aware of lot of mistakes that can affect your company growth and expand. Here revealing the accounting mistakes which you can avoid to save your startup.
DIY is certainly not a right move even if you have accounting knowledge. Initially you may think financial figures are manageable but gradually you might lose control over it. As a startup, your focus should be on other duties that help to bring in more customers and boost your business. If you sit doing accounting activities, you are spending your precious time and effort which you can otherwise spend in business growth. A slight mistake in accounting can affect your business as money is the lifeline of any business. So it’s better not to risk the business by handling the numbers yourself.
Hiring in-house accountant / team:
Confusing isn’t it? You might be thinking doing accounting by business owner is a mistake, agreed but hiring an accountant is also a mistake, how’s that possible? What to do then eventually? In-house accountant can add up to the expenses as you might have to pay for salary, wages and bonus. And if you hire an accounting team, your startup might end up. The best solution is to hire outsource accounting services. You have to only pay for the service asked for. Payment is on fee basis so it is certainly affordable than hiring a team. You are also assured with flawless accounting and bookkeeping. They also help you in cutting down unnecessary expenses.
Negligence towards small expenses:
In startups no expenses is big or small. An expense is an expense and you have to take a note of it. You never know when a small expense turns big and crush your startup. Like every drop counts, even every expense counts. Small, small expenses will accumulate and turn big which is not good for any business. Remember small expenses are significant, especially when your business is in growing stage. Also do not mix your personal expenses with business expenses, this can be unpleasant for your business. Create a system through which you can track and manage petty transactions.
Neglecting sales tax:
Tax is not just part of end of the financial year. Payroll taxes, sales tax depends on the type of the business, you may have to pay monthly or quarterly. Many startups and small businesses are not aware of these taxes and unfortunately end up paying heavy fines for crossing the due date. Knowledge and understanding tax laws will save you from such unnecessary expenditure.
Reliable accounting services will save startups from commiting all sort of financial mistakes. So better hire one, now.
Created on Aug 3rd 2018 01:31. Viewed 240 times.
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