1 / 9

Ultimate Guide to Accounting for Startups - Tianlong Services

Tianlong Services provide accounting and bookkeeping services to startups. Here is a PDF for startups to make a decision whether to outsource or DIY accounting. Visit: https://www.tianlong.com.sg/

Download Presentation

Ultimate Guide to Accounting for Startups - Tianlong Services

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Accounting for Startups is Different The Ultimate Guide to Accounting for Startups Don’t know where to start? We’ve got you covered. Tianlong Services - Accounting for SMEs

  2. Accounting for Startups is Different You experience much more trial and error when you’re doing accounting for startup than for a business with established accounting practices. Startups are fast-paced. Your accounting solution needs to be agile and forward-thinking to keep up with the pace and growth of your business. Startups are low on resources. You’re just starting out, so you’re likely short on people and time. Your accounting, while very important, can’t be the sole focus of your job. Startups are always, and quickly, evolving. Starting a new venture likely brings unexpected bumps in the road and an evolving business model. Your accounting solution should be able to adapt quickly. When deciding the best method for accounting for your startup, it’s important to ensure your solutions will support the instability and uncertainty that often accompanies starting a new business. Tianlong Services - Accounting for SMEs

  3. Accounting for Startups is Crucial 87% of startups fail because they run out of money 71% also cite issues with pricing and cost Money is the lifeline of your business. Managing your accounting properly leads to positive cash flow and prevents mistakes that are detrimental to your business. “ Financials tell a story; as an entrepreneur, you are the author of that story. It’s imperative to master the details of your finances and business plan, including all interdependencies. - Jantoon Reigersman, Straight Talk for Startups Co-Author Tianlong Services - Accounting for SMEs

  4. DIY vs. Hiring an Expert Now that you know the importance of startup accounting, it’s time to get into logistics. As an entrepreneur and self-starter, your instincts may tell you to manage your own accounting. However, some common issues startups face are actually why you should hire an expert: 1 Cash Flow Issues Poor Time & Quality Management 2 Company Growing Pains 3 Switching from Cash Accounting to Accrual 4 Trouble Establishing Financial Goals 5 Tianlong Services - Accounting for SMEs

  5. Metrics to Track Whether you decide to hire an expert or do it yourself, there are some metrics that you should absolutely need to keep tabs on at all times: Outstanding Accounts Payable: Outstanding accounts payable (A/P) shows the balance of cash you currently owe to your suppliers. Average Cash Burn: Average cash burn is the rate at which your business’ cash balance is going down on average each month over a specified time period. A negative burn is a good sign because it indicates your business is generating cash and growing its cash reserves. Cash Runaway: If your business is operating at a loss, cash runway helps you estimate how many months you can continue before your business exhausts its cash reserves. Similar to your cash burn, a negative runway is a good sign that your business is growing its cash reserves. Gross Margin: Gross margin is a percentage that demonstrates the total revenue of your business after subtracting the costs associated with creating and selling your business’ products. It is a helpful metric to identify how your revenue compares to your costs, allowing you to make changes accordingly. Tianlong Services - Accounting for SMEs

  6. How Do I Know I am Successfully Taking Care of My Accounting? Knowing Profits vs. Costs: One of the reasons startups fail is they don’t have an accurate grasp on the costs and profitability of their business. Knowing your budget and funding is key to your business’ success. Paying Yourself: When starting out, knowing how or what to pay yourself can be tricky. If you are paying yourself, you’re asserting yourself as a productive leader and creating a realistic view of your business. Accurate Recording: Organized and accurate records indicate that you are professional and on top of your financials. Positive Cash Flow: Generally, a positive cash flow is an indicator that your business is doing well. When you’re first starting out, however, this isn’t always the case. You may not see positive cash flow for some time, but you should have an idea of when you’ll start seeing it. Interpreting Key Data: Interpreting key data is fairly straightforward if you have an accounting background. However, if you don’t have a strong understanding on how your metrics translate into the success of your business, you’re probably missing out on important opportunities. If you feel like your current system (or lack thereof) isn’t cutting it, it’s time to reassess and seek out other solutions. Tianlong Services - Accounting for SMEs

  7. Finding Your Accounting Solution When seeking an accounting solution, there are a few factors to consider. Here are some tips to connect you with the right solution and make the process painless: Go in with an idea of what you need. Conduct an audit of your current books and process to identify your pain-points. An experienced accountant or team will have feedback and insight on items you may not have considered. Know your budget. Find someone that will help you manage your financials and help you grow your business at a reasonable cost that fits your budget. Ask the right questions. An accountant plays a key role in your business, so you may want to find someone that fits your company culture and is an expert in your industry. Asking questions like “what experience do you have in my industry?” will help you find your best fit. Ask for referrals. How do you find the services you use outside of work? You ask your friends & neighbors, get a quote and make a decision. Finding an accountant is not too different. Look to trusted resources and people (especially those colleagues working in your industry) to find what solutions worked best for them and what may work best for you. Tianlong Services - Accounting for SMEs

  8. You Have Options Now that you have an idea of what your accounting pain points are, it’s time to weigh your solution options. Hire an Accountant: A more traditional option, an accountant can take care of all your bookkeeping, invoicing and compliance needs. You get a personal touch with accountants, but they also can be very costly. Use an Accounting Software: Accounting software automates all your accounting processes and tasks, so you don’t have to manually do them. Moreover, the accessibility of software enables you to have a fresh perspective into your accounts 24/7. Although you don’t have an accountant on site, most software provides technical accounting assistance when you need it. Both options will provide the basics that you need, it’s just a matter of preference and cost. Tianlong Services - Accounting for SMEs

  9. Prioritize Your Startup’s Success portal.scalefactor.com Prioritizing your accounting is necessary for your startup’s success. Tianlong Services automates the tedious and time-consuming tasks that you are currently facing with your startup accounting. As a startup ourselves, we know what it takes to manage and maintain a business. Our team of dedicated experts and powerful accounting software ensures the accuracy and health of your accounts, giving you peace of mind and time to focus on what you love about running your business. Tianlong Services - Accounting for SMEs

More Related