Every business starts with dreams. Maybe you dream of expansion, franchising and plush offices. Maybe you dream of being your own boss, or being the best at what you do.
What people don’t tend to dream about when they get started: payroll, bookkeeping and tax. That’s right. I’m talking about accounting. My message today? Think of everything you hope to get out of running a business. Accounting is what makes it possible!
The importance of accounting
Now, a lot of start-ups begin with some knowledge of accounting. Some start with none at all. Either way, you quickly realise that it matters.
Good accounts are the foundations of a healthy business. How else do you know the state of your business? I’m thinking of the basics here: what you can afford to invest, and where you need to invest.
It’s not just about keeping things ticking over. It’s about how you sustain the business and grow. Your books and filing will have an impact on your credit rating, insurance premiums and ability to access loans. Accounting matters.
Accounting is a process, not an event
Picture the scene. A filing deadline is approaching. You’re scrambling around to dig out receipts. A long, unfinished online form sits in front of you. Every other question sends you down a Google rabbit hole.
Is this a good use of your time? Is this stress necessary? Accounting is an ongoing task. Manage your books, receipts and all the rest on that basis. It can either be a small set of regular tasks or a single, enormous and horrible task! And that’s what I mean when I say it’s a process, not an event.
The good news: everything I’m talking about is easier now. Accounting software is a booming market, thanks to the growth of tools like Xero and Sage. My advice? Use these tools and make the most of them! Sometimes, technology really does make life easier. This is one of those times.
Find the support you need
“What’s the best use of my time?”
That’s a question all entrepreneurs should ask themselves. It’s common for new business owners to try to be on top of everything. In a startup with stretched resources, you may feel you have little choice. But let’s go back to that initial question about the best use of your time.
As much as possible, you want to be consolidating your position. That means chasing leads, creating products, pursuing connections, promoting the business, and all the other things that grow revenue.
Back to accounting. Is it the best use of your time? How can you be sure you’re not overpaying on tax? Good-quality outside help and advice is always worth considering. Why? Accounting is fundamental to keeping your business healthy, but it isn’t necessarily the best use of your time. Relying on the professionals will free up your time and take all that stress off your hands.
Thanks to Ben, Stu and everyone at Hexa for giving me the chance to take part in this series. Hopefully it helps navigate some of those challenges all startups face.
I’m always happy to help make these matters accessible. So, if anyone’s got any questions on the mysteries of accounting, I’d love to hear from you!