Getting a business startup to grow is incredibly difficult. Especially in the USA. In fact, the bureau of labor services estimate 80% of businesses don’t survive one year. It’s a sobering fact that many prospective business owners have to deal with.
However, if you do survive a year, there are other problems that appear. Some would say they’re good problems to have. Afterall, you’re still in business. Accountancy can be a problem.
The main reason accountancy can be hard for new businesses is that when they grow fast, it can be hard for business owners to retain control of bookkeeping. Especially if there are awkward elements of accounting like lease accounting, rent expense, and trying to stick to new ASC 842 guidelines.
Here’s how you can help yourself and your business to continue to succeed by ensuring you properly account for your businesses finances.
Use Accounting Software To Help With Complex Accounting
You’ll find that as your time becomes pinched due to business growth, you won’t have as much time to devote to accounting. This can lead to mistakes and inaccurate calculations. It’s why software can help you out.
For example, if you rent an asset that you don’t own, such as an office, warehouse, shopfront, etc, you need to account for the lease under the new lease accounting standard ASC 842. Lease accounting can be complex even for accountants and calculating your rent expense can be problematic.
Accountants will use lease accounting software and you can use this too to help your business. It’s particularly effective if your business is the lessee or the lessor for multiple items of machinery, premises, or other business items.
There are different kinds of lease accounting software and indeed, general accounting software out there. It’s just about taking the time to find what’s right for you and your business.
Get Into A Solid Bookkeeping Routine
It’s all about being disciplined. If you want to keep hold of the accounting for your business you need to be able to dedicate time to it. Make sure you get into a good practice of bookkeeping. Record income and outgoings and make sure you put a date next to everything.
As your business ramps up, this can get quite hard. For now though, just stick to your bookkeeping regime and make sure it gets the time you’ve cut out for it. It’s when you start putting it off and leaving it that trouble starts to arise.
The first thing to do is ensure you use spreadsheets that are set out properly. There are some good templates online you can use. Don’t use pen and paper accounting. It’s so easy to lose everything. You can misplace your book, or lose it in something like a fire.
Make sure your spreadsheet is secure, and saved to the cloud. Something like office 365 can make sure that if your computer has a meltdown, you can still access your account elsewhere.
Get A Business Account
If you haven’t already, consider getting a business account. Your bank probably offers one. Keeping personal and business accounts separate makes things far easier to work out and account for. If they’re not separate it’s easy to accidentally spend money set aside for tax, or to forget to mark down some income or expenditure.
Don’t just ask your own bank though. There may be better banks offering better rates and benefits elsewhere.
Hire An Accountant
It sounds like something that would be pretty expensive. The reality of it is that it doesn’t have to be. Some accountants don’t charge much at all and do a great job. It depends on how complex your business finances are.
However, be aware that some accounts aren’t good, and can cause more problems than they’re worth. Cheap accountants and ones with bad reviews have been known to mismanage finances and incorrectly filed tax returns.
Remember, you’re always liable, even if you hire an accountant. So, if you’re going to hire one be sure to do your research. Check reviews online and see if you can speak to someone who uses them. Try to find a good one via word of mouth using your contacts too.
It’s really worth putting time into trying to find a good accountant instead of just hiring one of the first you see online.
To conclude
you need to make sure the accountancy element of your business is being taken care of and in good hands to ensure you can effectively run your business. There’s a reason why accounting is such a big business. Business owners simply don’t have the time to process effective accounting while running a business.
Ella Marcotte
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