Business Magazine

6 Business Essentials To Keep Your Startup Thriving

Posted on the 15 March 2016 by Martin Zwilling @StartupPro

startup-accounting-systemI’ve noticed a great tendency among startup founders to ignore the essentials of business accounting in the early stages of their startup. Just because you are not profitable yet, doesn’t mean you can skip the record keeping.

In fact, just the opposite is true. When you anticipate losses for the first year or two, it is more important to properly document all expenses, including tricky ones like business travel, business meals, and your home office. Sloppy documentation and reporting of these expenses is an open invitation to an IRS audit, which is the last thing you need or can afford during the busy startup period.

Expense accounting is just one of the key record-keeping requirements for a successful business:

  1. Expenses and income. You'll need a check register, a cash receipt system, and a record of bills. Also you should include tax records, bank statements, cancelled checks, bank reconciliations, notices from and to your bank, deposit slips, and any loan-related documents. Keep good backups of all computer files.

  2. Invoicing and payments. You can’t make any money unless you bill your customers on a timely basis, and follow-up regularly on missed payment commitments. If your average receivables period exceeds 45 days, your cash requirements go up fast. I recommend one of the many cloud-based and low-cost tools to help, such as the Viewpost business network.

  3. Corporate records. Include here articles of incorporation, bylaws, shareholder minutes, board minutes, state filings, stock ledger, copies of stock certificates, options and warrants, and copies of all securities law filings. In all cases, don’t forget permits, licenses, or registration forms required to operate the business under federal, state or local laws.

  4. Contracts. All the contracts you have, even expired ones, should be saved indefinitely. These would include equipment leases, joint venture agreements, real estate leases, and work-for-hire agreements. It is also good to keep correspondence sent and received by mail, faxes, and important e-mail that you might want in hard copy.

  5. Employee records. Include here completed employment applications, employee offer letters, employee handbooks or policies, employment agreements, performance appraisals, employee attendance records, employee termination letters, W-2s, and any settlement agreements with terminated employees.

  6. Intellectual property records. This is an especially important category. Make sure you file a copy of all trademark applications, copyright filings, patent filings and patents, licenses, and confidentiality or nondisclosure agreements.

Of course, these days you need a personal computer or laptop dedicated to your business with some basic software tools. You should investigate the wide variety of software systems that are on the market, and pick one you makes you comfortable, since you will probably be doing the basic data entry yourself. This not only will save you money, but it will keep you intimately aware of all expenses and the condition of your overall business. In my experience, the most common small business accounting system I see in startups is QuickBooks Pro by Intuit.

Even if you have the money to hire an accountant, you should keep a grip on your business financial affairs. You should be able to explain to yourself how much money you owe out to others, how much others owe you, and how much cash you have on hand. Don’t be shy about investigating local classes as adult education, or even a seminar with the SBA on bookkeeping.

An accountant may not be necessary, but you still can’t skip the tools. You can't walk in with a bag full of receipts. The more organized you are, the more organized you will be when presenting this material to an accountant. That translates to reduced bills from the accountant, and a reduced tax bill from the IRS. You will save time and money, and be more confident about your status.

Good record-keeping practices are required to comply with tax laws, and to operate your business properly. When you incorporate your business is the right time to establish the records system. Don’t let your dream get killed by ignoring business basics.


You Might Also Like :

Back to Featured Articles on Logo Paperblog

These articles might interest you :

  • Harry and Meghan Announce That They Are Expecting Their First Child

    Harry Meghan Announce That They Expecting Their First Child

    The Duke and Duchess of Sussex while arriving in Australia for their first official overseas tour have released some special news. They are having a baby. The... Read more

    The 15 October 2018 by   Solarisastro
    BODY, MIND, SPIRIT, SPIRITUALITY
  • Concert Review: Some Roads Lead to Rome

    Concert Review: Some Roads Lead Rome

    Sir John Eliot Gardiner brings old-style Berlioz to Carnegie Hall. by Paul J. Pelkonen Sir John Eliot Gardiner. Photo courtesy Carnegie Hall. Historically... Read more

    The 15 October 2018 by   Superconductor
    CULTURE, THEATRE & OPERA
  • Cali Mavericks DoubleWood Whiskey Review

    Cali Mavericks DoubleWood Whiskey Review

    A craft bourbon made in California, through contract distillation, and finished in toasted French Oak; Cali Mavericks DoubleWood Whiskey is the latest thing to... Read more

    The 15 October 2018 by   Josh Peters
    DRINK
  • The Definitive Guide to Surviving Shopping at DMart

    It is a known fact that shopping at a DMart store can be a life-threatening experience. Which is why a guide like this is absolutely essential. Read more

    The 15 October 2018 by   Tejas Nair
  • Halloweens from Our Youth & Hellish Costumes

    Halloweens from Youth Hellish Costumes

    Let’s start with the obvious here. You could not breathe in these masks back in the 70s. You felt like you were being suffocated or worse. Read more

    The 15 October 2018 by   Midlifemargaritas
    LIFESTYLE
  • North American P-51D Mustang

    North American P-51D Mustang

    @ Camarillo Municipal Airport, CA August 2017 This P-51 Mustang “Bunny”, from the Palm Springs Air Museum, taxies by for takeoff at the Wings Over Camarillo... Read more

    The 15 October 2018 by   Htam
    PHOTOGRAPHY, SOCIETY
  • ✔638. Westleigh Park

    ✔638. Westleigh Park

    Havant Waterlooville 0-1 GatesheadNational League Saturday 13th October 2018 Havant is a town in the south east corner of Hampshire, situated in between... Read more

    The 15 October 2018 by   Smidrophenia
    SOCCER, SPORTS

Magazines