Becoming a business owner is exciting and challenging at the same time. While you have perfected your products or services, payroll, marketing strategy, and other business functions, bookkeeping is often the least priority. Studies also show that a quarter of small and medium business owners need to be better versed in bookkeeping, despite the crucial importance of bookkeeping for startups and new businesses. Building a solid foundation in bookkeeping helps you stay organized, control expenses, boost efficiency, and identify opportunities and risks.
4 Benefits of Good Bookkeeping for Startups
Knowing the basics of bookkeeping is important for any business to steer your company in the right direction, but it is even more crucial for new startups and growing companies. Here is a closer look at the benefits of good bookkeeping for startups:
- A structured method of tracking financials: Every business needs a structured method of tracking its business financials. Bookkeeping entails recording all the money coming in and flowing out of your startup systematically and consistently. While most bookkeepers use sophisticated software to track the financials, they may use Google Drive or Excel sheets to record data at the simplest level.
- See where you stand: A key benefit of bookkeeping for startups is that it allows them to see where they stand and how they perform financially at any given time. Bookkeepers meticulously record all transactions, including fixed assets, unsold inventory, accounts receivables, accounts payable, loans, and other financial details. With vital data at your fingertips, you can easily evaluate the past activity (the historical financial record of your business) and understand where you stand regarding your business’s financial health.
- Track payments: Delayed payments from clients significantly impact small businesses and startups. A survey shows that most small business owners have experienced late payments. As a result of the delays, small businesses have had to delay hiring, cut back on hiring and employee hours, and delay purchasing inventory. When combined, these delays can result in a decline in revenue. Not getting paid on time will also impact a business’s ability to repay loans and make investment decisions. Sending invoices on time, tracking payments due (accounts receivables), and following up on dues are the vital tasks bookkeeping professionals handle to mitigate these risks.
- Get the funding you need: Another reason why bookkeeping for startups is vital is that they can use the financial information to convince banks, lenders, suppliers, and creditors to invest in their venture. Banks and lenders rely on accurate financial data to make investment decisions. You will also need the data to comply with government/IRS regulations.
Outsource Your Startup Bookkeeping to the Right Professionals
The idea of creating something new and the freedom, flexibility, and satisfaction of being their own boss are reasons entrepreneurs start a business. While bookkeeping is not the primary motivating factor, it is the foundation for your startup’s success. At Bookkeeping For You, we handle the end-to-end of bookkeeping for startups and new businesses to help you get off on the right track, and stay there.
Working with our bookkeeping team allows you to focus on building your business while we take care of the tedious tasks, including:
- Recording financial transactions
- Working with your tax preparer
- Preparing financial statements
- Handling accounts receivables and payables
- Tracking cash flow
- Processing payroll
- Bank account reconciliation services
- Business growth consulting
Contact us to get started working with our small business bookkeeping team and to learn more about how we can help you build a strong financial foundation to grow your business.