02 Apr 4 accounting tips for start-ups
Accounting is an important subject for all business owners, especially as it’s often considered the “language of business”.
Here are some of the main things to consider to help your business grow and remain profitable.
1. Separate personal and business expenses
Just as it’s important to keep your business and personal life separate, it’s also important to keep your expenses separate. If your personal and business expenses aren’t separated, it becomes very challenging to manage the cash flow of your business and keep track of your net income. It’s best to open a separate bank account for your business.
2. Hire an accountant
You will likely pick up the fundamentals of accounting as you learn to manage your start-up’s finances, but you will never be able to match the expertise of someone with a professional degree in accounting. This is especially important as your business continues to grow and you have to devote more time to it as your finances become more complex. Even hiring a freelance accountant for a few hours per week or per month can make a huge difference and take the weight off your shoulders.
3. Use cloud accounting software
Managing accounts isn’t for everyone. It’s important to know the fundamentals of accounting, but if you’re not very good with numbers, you may find it easier to start using good cloud-hosted accounting software. Cloud accounting gives you instant access to the latest figures, helps you keep track of income and expenses, sends and tracks invoices on your behalf, and can be used in conjunction with your accountant.
Approximately 30% of new businesses fail due to running out of cash. This is unfortunate but can be prevented by keeping proper track of your finances and making sure you have enough in savings. You’re likely to face cash flow problems if your invoices aren’t paid soon enough or if work doesn’t come up, plus you could miss out on investment opportunities if you don’t have any cash on hand. To avoid this, you should have enough savings to propel your business for at least 3 months – the more the better.
If you have a start-up business based in Manchester and are looking for help keeping your finances in order, contact us or call us on 0161 706 0444 today to find out how we can support you.