After working with several startups and speaking with many small business owners, we have noticed that the implementation of accounting processes is not always a top priority. To help you avoid making the same mistake, we want to share with you some basic tools and services all new companies should implement before opening for business.
- Separate business bank account – Commingling your business with your personal finances is a no-no. Keeping track of business expenses is hard enough even when tracked separately. Having to sort through hundreds of personal and business transactions in a combined bank statement will give rise to potential errors in your company’s financial statements and tax returns. It will also compromise your audit support if under tax audit.
- Tax accountant – Initially, you may be able to handle your company’s bookkeeping, but handling tax issues and business tax structures is better left to a tax professional. If you have budget concerns, you can limit the scope of the engagement, but still have access to professional advice for the more complex tax issues.
- Accounting software – The implemention of an accounting software for your new business no longer needs to come at a significant cost. Many providers offer very low-cost or even free access to some of the software’s basic features. You then have the option to add additional features as your business grows. Having accurate and robust financial records from your company’s inception will be invaluable as you grow your business and seek potential investors.
- Payroll service provider – If your company has one or more employees, it is important to secure a payroll service provider from the beginning. This will allow you to outsource not only the processing of your company’s payroll, but the management of payroll tax filing requirements as well. Fees to engage with a payroll service provider are generally nominal as they are often charged on a per-employee basis with no setup fees.