Getting a startup business off the ground is a monumental effort. You need to accomplish rapid growth in a relatively short period of time. For that to happen, there are what seem to be an endless number of pieces of the puzzle which all have to fit together perfectly, and it’s up to you to make sure that they do. If you’ve received or hope to receive funding, you’ve got investors to answer to, and they’re expecting to see some very impressive results.
Through all of this, you still have to manage the day-to-day affairs of your business. Startups are no different from other businesses in the sense that you’ve got bills to pay and payroll to meet. All of this is going to require some bookkeeping work, even though that’s not one of your core competencies. Here are a few tips which may help you and other fast growing startups manage your bookkeeping:
- Open a business bank account.
This is a given, and a legal requirement, for corporations, partnerships, and LLCs. But even if your startup is a sole proprietorship, it’s important to have a dedicated account, to keep business funds and records separate from your personal and family matters. You’ll need to have registered your business name with your state before you can open a bank account in the company name.
- Keep financial records, always.
We know how busy you are, and that there’s no time for mundane stuff like bookkeeping. But even on the most hectic of days, it’s crucial that you don’t let any financial matters slip through the cracks. Accurate record keeping is an essential step because it gives you the information you’ll need to monitor your growth, prepare for tax filings, and create financial statements.
- Set up a bookkeeping system.
If there’s one thing we’d like to tell all of the owners of startups reading this blog, this would be the one. You’ve got to have a bookkeeping system in place, preferably from day one. If you haven’t started already, please do so immediately. You can do it yourself, hire a bookkeeper to come in periodically, or outsource it all to a virtual accountant who’ll manage it in the cloud. If you want to manage this in-house, there are software products that will manage just about every bookkeeping task you need to deal with. Or you could record everything in a spreadsheet. Heck, you can even use a pencil and a good old-fashioned ledger book. But don’t let it wait any longer. You need to keep your financial data accessible and well-organized, or you’ll have a huge task trying to recreate it later on. This is particularly true for fast growing startups, which could experience a rapid growth spurt at any time. Setting up a good foundation of bookkeeping now will help you be ready for the increased workload should things start to snowball.