Starting a new business venture requires you to focus on many areas, from acquiring customers to generating revenue. While those aspects are key to your business’ success, one area that always needs attention is financial health. Registered chartered accounting firm Drumm Nevatt & Associates share a few accounting tips to get your startup on the right track.
It is essential for startups to build a solid accounting foundation, as, without a sound understanding of the numbers, you will not survive. Accounting will provide you with the most straightforward path to your business’ success and give an accurate picture of your financial health.
A common issue faced by many business owners while running a new startup is keeping a close eye on expenses. Simple expenses like office stationery, team coffees etc., can drain your bank account before you know it.
“Utilize a business credit card to pay your expenses and link it with good accounting software to keep track of your spending,” says Craig Nevatt, Director at Drumm Nevatt & Associates.
How you manage your finances will play a significant role in the viability of your company. That’s why a cornerstone of any startup is having a budget and then sticking to it. Starting a budget can be simple as creating a spending plan that considers both current and future income and expenses. Having a budget keeps you on track when you are trying to achieve your business financial goals.
When you’re setting up your business, you need to determine your tax obligations to discover how your choices could impact you when taxes are due. Understanding your business taxes can also help you take advantage of certain tax deductions, which can save you money.
Startups should use technology such as accounting software, as it can automate much of the recordkeeping process and maintain financial records. This makes it a lot easier to record the amount, time, place and business rationale of a transaction when you claim expenses as tax deductions.
“Using cloud-based accounting software will make it easy to access your business financial details from anywhere in the world,” adds Craig.
2020 has taught everyone the importance of having a plan for the unexpected. Take the time now to create a crisis money plan. “Having three months’ operating expenses on hand can help you navigate the expected, but ideally, you need to be able to support yourself financially for at least six months without an income,” comments Craig.
As experts in all things business accounting and business growth, Drumm Nevatt & Associates can help you with your start up accounting needs. They know all the ins and outs of business finance and will work hard to find solutions that work for you and your business.
Contact Drumm Nevatt & Associates for all your business development, bookkeeping and accounting needs.
Phone: 64 9 534 4382
69 Ridge Road, Howick, Auckland 2014
PO Box 54 060, The Marina, Auckland 2144
Phone: 64 7 576 2194
23 Myres Street, Otumoetai, Tauranga 3110
Phone: 0274 587 724