06 Dec Why is accounting so important for start-ups?
Whether you choose to be a limited company or a sole trader, all new businesses start somewhere.
All new businesses also need to pay attention to a few crucial areas if they are to succeed in the long term. Start-up accounting is certainly something any nascent company should be aware of. But why is this?
Helps with effective money management
It goes without saying that money is essential for any start-up. If you do not track how much is in your business account, you run the risk of running out. This would see you cease trading because you do not have the finances to carry on. In addition, it could also prove disastrous if you do not pay attention to how much is going out in terms of expenses. By far the best way to guard against these issues is to pay attention to start-up accounting.
Ensures you meet relevant HMRC deadlines
Most new business owners will know about submitting tax returns to HMRC each year. From self-assessment tax returns for sole traders to more detailed limited company accounting requirements, this is something you must do. In addition, you may also need to submit payroll details to HMRC each month by a certain date. Focusing on start-up accounting not only helps you to get the paperwork you need together but also helps you to remember when you should submit it. Hitting any relevant deadlines is key because you could face stiff penalties if you do not.
Planning for future growth
Although accounting for start-ups is useful for the short-term, it is also critical for the future. As a new company, you will be determined to not only become established but also grow in the next 5 or 10 years. This will not happen by accident and this is where accounting comes in. By reviewing your financial performance, you can pinpoint what is working and where things could be improved. This in turn helps you set goals for the future and map out how your business will grow.
Start-up accounting in Manchester
Although the above shows just how important accounting is for any new company, the problem for many entrepreneurs is that they do not have the time or specialist knowledge to handle it. If you are based in the Manchester area and need a hand with accounting, get in touch with SQK Accountancy today on 0161 706 0444.