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6 small business accounting tips for startup businesses

Published On: June 23, 2020Categories: Accounting, Support, Tips & Tricks

When you first commit to losing weight, you track your calorie intake as well as your kilos. 

When you bring your newborn home for the first time, you no doubt keep track of their size and weight, comparing these against the averages.

Your startup is no different.

Starting a business is a major endeavour. Sure, you’ve got a great idea or a fresh new approach – however, if your startup fails to get off the ground, you aren’t going to end up surviving for very long.

The thing is, your accounting needs as a startup are going to be very different to those of an established business, a retailer, or a large enterprise with an annual turnover in 7-digit figures.

Fortunately, our small business accountants in Melbourne know exactly what startups need.

Let’s get one thing straight: your startup NEEDS an accountant on its side

Startup culture is unique in how self-sufficient it is. You and your team take pride in your ability to fix problems, hack solutions together and work lean.

It’s an admirable trait – however, it’s one that you can’t afford to carry over to your accounting and finances.

Finance is the lifeblood of any business. It’s crucial that your team gets the right advice to ensure that your startup survives the lean stages and grows to a fully-fledged (and successful) business.

Essential accounting tips for startup businesses

1) Good accounting starts with good systems

Accounting is more about selecting a trustworthy small business accountant in Melbourne to look after the numbers for you – it’s about setting up the right systems to ensure that your startup’s finances are accurate and looked after.

With the right system, you can:

  • Reduce errors and mistakes
  • Automatically generate the information you (and investors) want
  • Automate things like pay runs, reporting, invoicing and more

And all using a single easy-to-use platform!

Of course, your system can’t be too complex. As a startup, you’re running lean – you might not have the people power to dedicate to a more comprehensive system.

Our small business accountants in Melbourne set you up with a cloud-based accounting system that takes the strain off your team, while ensuring that you have all the information you need to make the right calls.

On top of that, we can also recommend and implement other systems to ensure that all aspects of your startup’s finances are easy and effortless, including optimising existing systems and processes.

2) Your business accountant does more than just report – it’s all about strategy

As a startup operator, you no doubt understand the importance of a good strategy. While your ideas might be one-of-a-kind, you need a strategy to bring it to market and grow.

What you may not know is that accounting is about more than just giving you the numbers – it’s about getting your financial planning right for the future. Unlike bookkeeping, accounting takes a long-term view.

And sometimes, that can involve helping you strategise.

Our small business accountants in Melbourne understand your goals, and using the numbers make recommendations to help you get there. We’re a valuable part of your planning team – one that many startup owners don’t realise they have.

The next time you meet with your accountant(s), be sure to ask them for their input – we’re sure they’ll be glad to share their thoughts!

3) Be ready to scale up

Startup life is unpredictable. One moment, it’s business as usual – the next, you’ve just landed a big backer, or had your unique product or service go mainstream.

There’s no telling what tomorrow might bring – that’s why it’s so important that your startup accounting is flexible enough to scale with your startup’s fortunes.

One of the advantages of cloud accounting software is how it makes accounting easy for startups that are short on manpower.

That isn’t all, however – cloud accounting is also scalable, and can grow with your startup thanks to a range of packages and options that you can seamlessly switch between.

Take it from us, Excel won’t handle growth or complexities anywhere near as well as something like Xero, MYOB Essentials or QuickBooks.

business accountant in Melbourne

4) Separate your personal and business finances

This is a mistake that all sorts of small businesses make, startup or otherwise!

It’s tempting to just use your personal accounts. After all, it’s simpler, cuts out work and means that you get your earnings directly.

However, it also comes with considerable risks:

  • It exposes you directly to business liabilities and debts
  • Business taxes and expenses come directly out of your savings
  • It makes your personal accounting confusing
  • You miss out on many business tax benefits

Unfortunately, making the switch can be difficult – depending on how long this arrangement has been in place, it could take hours of work to disentangle your personal and business finances.

You don’t have time for that – luckily, it’s something that our small business accountants in Melbourne can take care of for you.

5) Don’t forget: you need to attract investment

Other businesses use accounting to make decisions. Startups use accounting to do that, as well as attract investors.

As a startup, you’ve got a great idea. However, you need money to turn that idea into a viable product and successful business. Good accounting is key in swaying investors to put their money in your corner.

And you can’t have good accounting without a good business accountant!

A good accountant understands how important getting investment is to startups, and will create reports tailored towards getting money into your startup.

What’s more, we’ll also offer advice that you can use to make your startup a more palatable investment choice.

6) Make sure your accountant has full access

One you find a small business accountant in Melbourne who gets your startup and everything it stands for, you need to give them unlimited access to your accounts.

They need to know everything that happens finance-wise in your startup if they’re going to help you achieve your goals.

For this to happen, they need to have access to everything.

It’s scary handing over that much access over your baby – we get it. Trust us though, it can save you a lot of trouble later on!

Choose a small business accountant in Melbourne that specialises in helping startups

As a startup, you’ve grown accustomed to working at the margins, making do with limited resources, and overcoming challenges by yourself.

However, your finances are one aspect of your business that you need to take care of the same way that other businesses do!

Since 1966, Bruce Edmunds & Associates has been helping small businesses of all stripes get to where they want to go.

And that includes hundreds of startups just like yours.

Give your startup a solid financial base – get in touch with our small business accountants in Melbourne today on (03) 9589 5488, or click here to request an appointment.

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