What are the benefits startups can redeem in accounting?
Warren Buffet once said, “Accounting is the language of business.”
Now suppose Mr. XYZ starts a company. He has the funds to run his startup. Also, a robust business plan with sound research and strategy is done. But, he is not aware of the language of business. In simple words, he is unaware of the benefits accounting can redeem. To our surprise, several entrepreneurs and business owners like Mr. XYZ. Around 60% of small-business owners feel they are not knowledgeable about accounting and finance.
What is accounting?
A company needs to keep track of all the expenses and income. In accounting, you need to maintain records of all financial transactions. Eventually, it leads to sound cash flow management. Accounting starts with drafting a strategic budget. Secondly, you develop a bookkeeping system. Then, you create a trustworthy payment gateway. After which, you set up a payroll system.
Last but not least, you prepare financial statements. It shows an accurate picture of your business’s financial health. Accounting holds much more than the before stated. Therefore, we are unfolding the benefits that accounting has in store for startups.
Why is accounting vital for your startup?
According to Wasp Barcode, around 21% of SMB owners admit not knowing enough about bookkeeping. But you must know bookkeeping leads to better and informed financial forecasting of a company. As a result, you can strategically draft your business plans. Secondly, you can access your business’s accurate accounts and cash flow. Eventually, this helps in receiving payment timely. Thirdly, the tedious nature of bookkeeping increases the chance of higher human errors. So many entrepreneurs have started looking to outsource their bookkeeping to experts.
Outsourcing your bookkeeping will lead to secure & reliable financial health. They also take care of your monotonous task of bank reconciliation. Since monthly reconciliation keeps your books clean and brings countless benefits, maintain a clean general ledger and prepare accurate financial statements for your business. Lastly, an outsourcing accounting firm will provide unlimited consultations.
2. Payroll System
You need to set up a payroll system to pay your staff on time. You often miss the IRS deadlines and become unable to pay on time. It can lead to low morale and legal difficulties. That’s why you may require a payroll service provider. You outsource your payroll system to a payroll service provider.
You can get the best payroll solution that fits your startup. Your payroll checks are printed on time. Additionally, a report of employees’ vacation, sick days, new hires, etc., is always ready. You don’t need to worry about the Free IRS and State tax reporting. Lastly, you get access to reports that the government agencies always require. A payroll service provider eases things for you. As a result, you spare more time for your primary operation.
3. Cashflow Management
Cashflow management is one of the main benefits of accounting. While adequately maintaining books, you are also paving the way to positive cash flow. On the contrary, if books are not maintained accurately, it leads to a cash crisis. Due to the crisis, entrepreneurs shake hands with a cash management service provider.
A cashflow manager gains a depth of knowledge of your cash flow. They build an accurate cash flow projection. Plus, they provide cash collection acceleration techniques. They give the best-proven effective collection and payment policies as well. Finally, yet importantly, they help you get the maximum rate of return on your idle cash.
By now, you have read enough about outsourcing various services. But what’s that an accounting outsourcing firm possesses but a startup doesn’t. It’s nothing but accounting software. The cost of installing and updating accounting software is huge. Therefore, startups and small business owners outsource accounting and bookkeeping. There is various accounting software like- QuickBooks, FreshBooks, Xero, etc.
QuickBooks is the ideal business accounting software for small to mid-sized business owners. Primarily, it saves time on bookkeeping and paperwork by automating the tasks. Secondly, it generate vital financial reports. Thirdly, QuickBooks can be tailored as per your startup requirement. Lastly, a virtual accounting firm integrated with QuickBooks provides QuickBooks Training.
If you are still looking for more reasons, click here to know why you must choose QuickBooks.
In a startup’s budding days, owners must face a host of problems. We at SKB Accounting help you kickstart and redeem the enormous benefits of accounting. The most significant benefit of shaking hands with us is that our estimates grow only with your startup’s growth. So, schedule a call with us now and get relief from the accounting stress.