Does talking about money, finances, and accounting make you cringe? These subjects can absolutely be hard to navigate, especially as a brand new business. There are many reasons to set up your accounting early. The fear factor surrounding it is at the top of the list. Many business owners let the fear of the unknown keep them from taking care of their systems. This will cause many problems later down the line that could really cost you in many ways. If you want to hear more reasons to set up your accounting early, keep reading.
Set up accounting while it’s simple rather than later when it’s more complex.
When your business is smaller, naturally, you have fewer expenses and obligations. This is the best time to set up your accounting systems. As you grow, you are able to build a firm foundation. When everything is tracked and organized from the beginning, it is much easier to transfer your systems to an outsourced accountant.
By setting up your accounting early, you won’t have to pay someone to “clean up” your books
As stated before, when you start early, you set a firm foundation. When you aren’t aware of the many reasons to set up your accounting early, it can be continually pushed to the wayside. This happens a lot with those who prefer to DIY their accounting. More often than not, the accounting part of the business is forgotten until it’s too late. This leads to the books not being done correctly. Many accounting firms, like us, offer “clean up” services where we go through your books and reorganize and clean everything up. Depending on the state of your books, this can be costly.
Having systems in place will allow you to see where your money is at all times.
If there haven’t been enough reasons to set up your accounting early, this one should convince you. In any and all businesses, cash flow is king. Knowing where you sit financially is one of the single most important things to know in your journey as a business owner. When you have a handle on your cash flow, it makes financial decisions easier and gives you more peace of mind in general. Worrying about money is never pleasant, and even worse when it’s your baby business.
Organized accounting systems make it easier to present yourself to investors.
If you have hopes to present your business to investors to receive funding or aid, you must have organized systems. One of the systems that need to be sparkly clean is your accounting. This will help to easily spell out to investors exactly how much money you’ve put in, how much you’ve made, and even what the future of your business looks like. Investors are not going to want to put their money into a disorganized company. They like assurance in knowing that investing in your business will be as beneficial for them as it is for you.
With all of these reasons to set up your accounting early, you’re sure to have questions. If you want to know more about how to set up your new business’ accounting systems, feel free to reach out to us for a consultation. We would be happy to help you at any stage in your business!