Unless you're an accountant, the word "accounting" probably strikes fear in your heart -- or a little bit of nervousness, at least. For young entrepreneurs, the feeling is probably amplified. After all, poor bookkeeping out the gate will not only set a project back in the short term but it can really come back to bite you in the long haul. Even young entrepreneurs get audited as well.
Here are four accounting tips to start your business:
Start off on the right foot.
The same way that you go through your email every morning, or the same way that you do an inventory review each week, make your business accounting a habit. Set a recurring alarm on your calendar: "Review books!" The frequency is up to you.
Learn the lingo.
The cumbersome terminology of accounting is sometimes the biggest hurdle. Chart of accounts? General ledger? Cash vs Accrual Basics? Accounting lingo isn't natural -- and ignoring and not knowing what everything means could come back to haunt you.
So take some time to understand the basics.
Find software that fits you.
Find the accounting software that's right for you. Don't simply opt for what your friends use. If you're always at a desk, a desktop solution, like QuickBooks or Sage might make sense. If you're like most entrepreneurs and are on the go 24/7, a cloud-based accounting software packages like Wave, QuickBooks, FreshBooks or One Up, would make more practical sense.
Value good advice.
Hire an accountant who can take away the hassle of bookkeeping and properly record your business expenses. This doesn't mean that you should not familiarize yourself with your accounts. You will simply have more time to focus on your business, while still ensuring your books are up to date.
Next week, we will discuss, another four tips.