Startup Accountants in London is proud to offer a variety of affordable bookkeeping and accounting services for startup businesses nationwide. Our team of dedicated qualified accountants ensures you get the best and affordable service at half the price.
Checklist of bookkeeping for startups
One thing you want to avoid is just cracking the books of your business when you're forced to—such as when you're taxing or courting a new investor. Here's the bookkeeper-recommended checklist to keep accurate books:
Weekly accounting tasks
Enter all transactions in your accounting software or Excel spreadsheet.
Even if you're integrating your financial accounts with software, be sure to enter everything else, such as cash transactions.
To categorize your transactions
Was that trip to Staples for office supplies or to pick up a new banner for your booth? These two items are categorized differently on your tax return, so please record the category while transactions are fresh in your mind.
File or digitize your receipts
We recommend filing (or digitizing) your receipts and old invoices on a weekly basis. Otherwise, you're going to lose them, and you might not be able to prove certain cost deductions if you get audited.
Monthly accounting tasks
Reconciling your bank accounts
This step is vital, and it protects you against any revenue or expense slipping through your fingers. Bank reconciliations can be tricky until you get into your habit. We've written a user-friendly guide to bank reconciliations to help you out.
Prepare and submit invoices (if applicable)
Be religious about sending invoices as soon as possible.
Paying vendors and other bills
Just get it over with that. Otherwise, you risk giving your vendors free cash in late payment interest. Late payments could also have an impact on your business credit score.
Review of outstanding invoices
See who hasn't paid for you yet, and follow-up. A smooth process of receivable accounts is the lifeblood of your cash flow.
Check your financial standing
We recommend that you schedule a dedicated time to manage the finances of your business. Keeping good records also means that your life is going to be easier when it comes to quarterly and annual income taxes for your business. And last but not least, with confidence in your books, you're going to be armed to make good financial decisions on behalf of your startup.
Financial Statements: the secret weapon of the startup
This is the part where accounting is going to be your best friend. Not only can you use well-maintained books to make sure that you have more money coming in than going out, you can also use your finances to make other decisions.
Runways
This key startup metric, at its simplest, is how much cash you have on hand compared to how much you spend each month. For example, if you have $50,000 in the bank and a project to spend $5,000 a month, then you have 10 months on the runway, even if you don't make a dime in revenue.
Ratio of net profit margin
Sometimes just known as "profit margin." Simply put, this number tells you how much profit you're earning for every dollar of revenue. In other words, are you spending too much? Do you need to raise prices or cut costs? You may be depositing a bunch of money in the bank, but this number shows you whether you're actually making a profit or just walking in the water.
A good accountant, or your Bench accountant, can help you generate these reports and manage the financial health of your business.
You're not going to find this information in a traditional financial statement, but if you keep organized records, you can find some gems like:
Where are the customers?
Are most of your customers in a geographical area like the Pacific Northwest? You're going to want to find out why, and make business decisions based on your findings. You may decide to run ads that are geographically targeted to that area, or to open an office there to make your prime demographic easier to access.
Who are your biggest customers, huh?
The Pareto Principle states that 80% of the effect comes from 20% of the cause. Are one or two large, loyal customers keeping the lights on? Find out what makes them tick, so you can keep them longer, and find more like them.
Who are the top vendors?
Are you the best customer of someone else? Use that data to negotiate volume discounts or to shop around for a better price for that service. Lowering costs will allow you to stretch your business' dollars even further.
Accounting and Bookkeeping: Do you have to DIY or outsource?
As a startup founder, you will need to decide early on whether to spend your valuable time on accounting and accounting tasks or outsource it to experts. Let's look at your options.
You can make your own books (if you have time)
If your startup is in its early stages, your budget is likely to be tight. In this case, you may want to consider managing the books of your business yourself.
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