3 financial rules for new businesses
It is a somewhat chastening fact that when you begin to realise how difficult it is to own a business, you must focus not only on the core business of the company but also towards those that involve the accounting aspect too.
For most people, the word accounting can generate fear or concern and this feeling is probably stronger in the case of young entrepreneurs. Bad accounting in the short term cannot affect your business and you can, in time, correct the flaws. However, in the long run, you can risk being audited and lose control of the company, which would potentially result in large losses of money.
According to Entrepreneur Magazine, to prevent this from happening, there are three unspoken rules to take better control of your new business` finances and accounting:
Start on the right foot:
In the same way you check your emails every day or do an inventory every week, start the same habits in the accounting of your business. Set yourself up notices or memos on a calendar monthly, or at least once a month, the frequency will depend on you. This way, the routine will become engrained and the finances will remain stable at all times.
Learn the accounting language:
Sometimes the biggest obstacle is the accounting terminology. This is because when we hear words like â€˜chart of accounts`, â€˜more passive`, â€˜active workbook`; it`s easy to not understand completely. In these cases it is advisable to take some time to understand accounting basics and for this, the internet can be a very useful tool.
Rate good advice:
The chances are, if you spend a lot of time trying to find an error in your accounting, you will eventually find the solution. The reality is though, that you have a business to run and there is a degree of urgency about the declaration of taxes you must do both monthly and annually. There`s no need to worry though, there are many resources out there to help, such as those at Capital Office.
Ultimately, the business of accounting is not as scary as you might think and can be more fun than it sounds. After all, it is what allows us to see the growth of our business.
Your Virtual Office London
If are thinking about starting a business, or if you have already taken the leap from idea to reality why don’t you speak to an accountant? We have qualified accountants who are experienced in working with small and start up business. They are happy to help explain the requirements needed when you start a business, information is power and we can help get your business funcitoning correctly for a long and prosperous future.