If there’s one mistake that can make or break your startup from the get-go, it’s failing to adequately understand the art of accounting. If you’re sighing “Boring” right now, then you really need to read on.
Neglecting to maintain proper accounting records can lead to a host of problems for a startup, from getting dinged by Uncle Sam for not paying taxes on time or in full, getting a bad reputation with vendors for paying late, or, in the worst-case scenario, running out of money altogether—and running your business into the ground.
If you know little or nothing about accounting, all is not lost. There’s never been an easier time to learn. Here are three steps to put you on the right path.
Take a course. Even if you use an outside accountant or have a bookkeeper in your business, as the business owner, you need to understand basic accounting principles yourself. Check out local community colleges, adult education programs, or your local SCORE office for help learning the basics of small business accounting.
Make it automatic. There are many good accounting software programs available to simplify and streamline the accounting process. What’s more, they make it easy to manipulate the numbers in different ways so you can keep track of key information like your sales, expenses and cash flow at a glance. Work with your accountant to choose the right accounting software package for your business.
Keep it up. Like an exercise program or a garden, your accounting system needs to be maintained regularly or you’ll soon find yourself in trouble. Set regular times to input and update data each week, and it will stay manageable. Delay or put off doing so, you’ll end up playing catch-up and potentially making some costly mistakes.
If accounting isn’t your strong suit, don’t feel bad—plenty of startup business owners are weak in this area. Do something about it by contacting the mentors at SCORE. Visit the SCORE website to get matched with a mentor who can help you get a grip on your small business bookkeeping—and help your business grow.