Keeping meticulous financial records is vital for startups to manage expenses and project revenues to appropriately plan for growth. But reality is that most startups lack the resources to hire financial services team members. That leaves the responsibility falling on the shoulders of founders.
As the head of a brand-new business, you have many tasks demanding your attention day in and day out. Rather than spending your time pouring over spreadsheets, you should be focusing on activities to drive growth. If you’re thinking about bringing in some help for your startup’s finances, this blog is for you.
We’ll help you figure out if you need a bookkeeper and what you can handle on your own.
Bookkeepers vs. Accountants
Having a bookkeeper can be extremely helpful in managing things like accounts payable and receivable, bank reconciliations, and payroll. While all of these tasks are essential, you may be able to get by keeping these tasks in-house and using a bookkeeping software program. One resource you can’t get by without, however, is an accountant.
An accountant has the expertise to help you analyze your financial records to make sure you are paying the right amount of taxes or to make strategic decisions about your business. Many startups will rely on business loans and other investments, which means you’ll need extensive financial reports that are difficult to prepare without the help of an experienced accountant.
During tax season, an accountant is indispensable since business taxes are more complicated than your personal income taxes. An accountant familiar with your particular industry niche can let you know everything you can deduct to ensure you pay the smallest sum possible and keep out of trouble with the IRS.
So, you can get by without a bookkeeper, but an accountant is vital to your startup’s success.
Bookkeeping To-Do List
When it comes to keeping up with your business’s books, the worst thing you can do is only check your finances at tax time. Here is a checklist to help you break down your bookkeeping tasks.
Weekly Bookkeeping Tasks
Enter all your transactions into your bookkeeping software or an Excel spreadsheet. If your accounts are integrated with software, be sure to enter anything else like cash transactions. Then, categorize each transaction for its purpose so it can be sorted and tracked as necessary. Finally, file or digitize all your receipts on a weekly basis so they are not lost. You may need them in the future if you’re ever audited.
Monthly Bookkeeping Tasks
Each month, reconcile your bank accounts to make sure no income or expense has slipped through the cracks. If necessary, prepare and send any invoices, then pay your vendors or other bills you have. Next, assess the status of your accounts receivable to make sure you don’t have any outstanding invoices. If you do, make any necessary follow up. Lastly, each month you should take stock of your overall financial position so that you are always aware of cash flow and can make any necessary operational changes.
Need Help With Your Accounting?
If you are in the DC Metro area and are ready to streamline your company’s accounting department, get in touch with the team at District Advisory. Our experienced professionals are available to provide your small to medium business with timely, consistent, and accurate advisory and accounting services. Contact the District Advisory team today.
