A startup founder can come from any experience and background – a founder can be a marketing expert, an IT guru or a skilled worker. However, not all startup founders are experienced in accounting.
One of the keys to building a successful business is closely monitoring financial transactions. Especially for a startup with a limited budget, the company needs to keep accurate records and create an efficient accounting system.
Startup Accounting: Top Things You Need to Track
To help, we listed down the top financial records and transactions that every startup should track.
One of the best benefits of online banking is that it’s easier for founders to track what’s going on in their bank accounts. This means it’s more convenient for owners to reconcile their accounts each month.
Tracking your bank statements ensure that you can catch any unauthorized transactions or accounting mistakes.
Credit Card Statements
Like with your bank accounts, it’s also vital to keep a close eye on your credit card statements. Credit card fraud could happen to anyone, and minor changes could make it to your startup’s credit card bill if you don’t pay attention. Ensure that there are records of all items spent on your credit card, mainly if several employees use it.
Speaking of employees, if you already have one or more staff, you should closely monitor payroll.
If your startup is scaling and your team is growing, you may have difficulty running payroll independently. You can subscribe to payroll software or hire an outsourced bookkeeper to take care of your payroll if you want to make things easier.
A sure way to file the correct taxes is to track your bills, including the more minor expenses (which you can claim against your taxes). You also want to be on top of your payables, ensuring that you settle them when they’re due to ensure you keep good credit and relationships with your vendors.
Proof of Payment
Maintaining a record of your startup’s financial activities is crucial, including tracking and keeping proof of payment. As a business, you need to ensure you have copies of all bills from suppliers.
Tip: Our favourite tool at Cloud CFO to keep receipts for our business and our clients is Dext (formerly Receipt Bank)
To keep your business afloat, you need to ensure that you are getting paid quickly. The first step is to send invoices to your clients on time. As you issue invoices, you need to keep an eye on your accounts receivables so you can remind clients when their due dates have passed.
As a founder, you have a lot on your plate, and you may find it a challenge to monitor the daily costs of running your startup. However, you want to keep track of these to forecast your future expenses and map out your cash flow.
As your new venture starts to file taxes, you want to make sure that you keep these taxation records. Generally, the Australian Taxation Office recommends holding these files (income tax return, BAS, FBT return) for five years to cover the review period.
Finally, you should review your financial statements periodically. This enables you to get vital information about your startup, its financial position, and cash flow.
Cloud Accounting Software
The items above may seem too overwhelming to monitor, especially if you only have yourself or a handful of staff helping you run the business. If you want to make your life easier, consider using cloud accounting software. You can conveniently record and track your financial transactions, pay bills, send invoices, and run financial statements with cloud accounting software. You can also integrate other tools into the software to create a seamless accounting process.
How Cloud CFO Can Help
Our team not only know our numbers, but we’re cloud accounting specialists too. We can help you set up and guide you through the leading cloud accounting software systems. Reach out to us today.