5 Accounting Problems Young Businesses Face when Starting Up

Starting and running your own business is an incredible experience. The ability to be your own boss, set your own schedule and play by your own rules is the dream of many. Arguably, the dampest blanket on this experience is running your own bookkeeping services, unless you are an accountant. What follows are just some of the obstacles new business owners regularly face when adding this additional task to their workload.

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1 – Obtaining Funding and Sustaining Cash Flow

It is rather obvious the getting money for a start-up is incredibly important. However, it is also one of the largest obstacles any new business owner will face. Wherever your company is looking for funding, make sure you have a reliable and presentable business plan. Bankers are not the only people that put value in concise strategy. Verifiable records of business done is also helpful. If your company has been running efficiently, funding sources will appreciate and increase confidence in you by reviewing the numbers.

Before and after establishing funding managing cash flow is paramount. Accounts in the black are a good sign, but they do not demonstrate a model is infallible. New expenses and hurdles appear in business regularly. Check all the boxes, prevent unwanted lapses between your money coming in and going out. For example, if you are paying suppliers faster than customers pay you this can cause issues. Make sure your timelines make sense and are in sync.

2 – Inadequate Bookkeeping Knowledge

Unless the business you started provides accounting services, you probably don’t have all the answers to questions that may arise. If you are not keeping complete and detailed records, your business may be in dire straits. Absolute and unwavering certainty in your bookkeeping is of the utmost importance. Spending a too much time trying to be the accountant you are not is costing your business money, driving you further from a bottom line in the black.

3 – Too Much on the Agenda

Entrepreneurs inherently wear several hats throughout the day. Be honest with yourself, is your bookkeeping receiving adequate time and careful attention? Successful businesses grow and expand, so does the required amount of meticulous record keeping. You may be managing your books now, but, ask yourself if you will be able to handle the volume and attention needed as business increases. Required paperwork, payroll and tax considerations seldom decrease as sales grow.

4 – Accountants that Don’t Understand the Industry Specifics

When hiring an accountant, it is important they know your industry. Expertise in what your business offers and how it provides service can be critical to maintaining accurate accounts. Just because an accountant did an incredible job keeping a restaurant’s books straight doesn’t mean they can provide the same to your company. A great bookkeeper or accounting service is more than a “number cruncher,” a great accounting will actually help drive you to success.

5 – Complicated or Inconclusive Accounting Software

Even the best software does not include an assistant sitting in the chair next to you. The time you spend learning the ins and outs of new software is time and money lost. You may not find features missing from your software, for an issue you did not realize you had until it is too late. You will either be forced to continue with software that doesn’t meet your needs or spend more money for software and time learning it. Be prepared for the uncertainties inherent in business ownership by making sure your solution can satisfy new and unforeseen challenges.

When it comes time to look for either software, a bookkeeper or an accounting service make sure they are ready to grow with you and your business. Being prepared is the best insurance policy a new business owner can hold.

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