When you first commit to losing weight, you track your calorie intake as well as your kilos.
When you bring your newborn home for the first time, you no doubt keep track of their size and weight, comparing these against the averages.
Your startup is no different.
Starting a business is a significant endeavour. Sure, you’ve got a great idea or a fresh new approach – however, if your startup fails to get off the ground, you aren’t going to end up surviving for very long.
The thing is, your accounting needs as a startup are going to be very different to those of an established business, a retailer, or a large enterprise with an annual turnover in 7-digit figures.
Let’s get one thing straight: your startup NEEDS an accountant on its side.
Startup culture is unique in how self-sufficient it is. You and your team take pride in your ability to fix problems, hack solutions together and work lean.
It’s an admirable trait – however, it’s one that you can’t afford to carry over to your accounting and finances.
Finance is the lifeblood of any business. Your team must get the right advice to ensure that your startup survives the lean stages and grows to a fully-fledged (and successful) company.
Essential accounting tips for startup businesses
1) Good accounting starts with sound systems
Accounting is more about selecting a trustworthy small business accountant in Melbourne to look after the numbers for you – it’s about setting up suitable systems to ensure that your startup’s finances are accurate and looked after.
With the right system, you can:
- Reduce errors and mistakes
- Automatically generate the information you (and investors) want
- Automate things like pay runs, reporting, invoicing and more
And all using a single easy-to-use platform!
Of course, your system can’t be too complex. As a startup, you’re running lean – you might not have the people power to dedicate to a more comprehensive approach.
Our small business accountants in Melbourne set you up with a cloud-based accounting system that takes the strain off your team while ensuring that you have all the information you need to make the right calls.
On top of that, we can also recommend and implement other systems to ensure that all aspects of your startup’s finances are easy and effortless, including optimising existing systems and processes.
2) Your business accountant does more than just report – it’s all about strategy
As a startup operator, you no doubt understand the importance of a good strategy. While your ideas might be one-of-a-kind, you need a plan to bring them to market and grow.
What you may not know is that accounting is about more than just giving you the numbers – it’s about getting your financial planning right for the future. Unlike bookkeeping, accounting takes a long-term view.
And sometimes, that can involve helping you strategise.
Our small business accountants in Melbourne understand your goals and, using the numbers, make recommendations to help you get there. We’re a valuable part of your planning team – one that many startup owners don’t realise they have.
The next time you meet with your accountant(s), be sure to ask them for their input – we’re sure they’ll be glad to share their thoughts!
3) Be ready to scale up
Startup life is unpredictable. One moment, it’s business as usual – the next, you’ve just landed a big backer or had your unique product or service go mainstream.
There’s no telling what tomorrow might bring – that’s why it’s so crucial that your startup accounting is flexible enough to scale with your startup’s fortunes.
One of the advantages of cloud accounting software is how accounting is easy for startups short on the workforce.
That isn’t all. However – cloud accounting is also scalable and can grow with your startup thanks to a range of packages and options that you can seamlessly switch between.
Take it from us; Excel won’t handle growth or complexities anywhere near and something like Xero, MYOB Essentials or QuickBooks.
4) Separate your personal and business finances
This is a mistake that all sorts of small businesses make, startup or otherwise!
It’s tempting just to use your accounts. After all, it’s simpler, cuts out work and means that you get your earnings directly.
However, it also comes with considerable risks:
- It exposes you directly to business liabilities and debts
- Business taxes and expenses come straight out of your savings
- It makes your accounting confusing
- You miss out on many business tax benefits
Unfortunately, making the switch can be tricky – depending on how long this arrangement has been in place, it could take hours of work to disentangle your personal and business finances.
You don’t have time for that – luckily, it’s something that our small business accountants in Melbourne can take care of for you.
5) Don’t forget: you need to attract investment
Other businesses use accounting to make decisions. Startups use accounting to do that, as well as attract investors.
As a startup, you’ve got a great idea. However, you need money to turn that idea into a viable product and successful business. Good accounting is vital in swaying investors to put their money in your corner.
And you can’t have good accounting without a good business accountant!
A good accountant understands how crucial getting investment is to startups and will create reports tailored towards getting money into your startup.
What’s more, we’ll also offer advice that you can use to make your startup a more palatable investment choice.
6) Make sure your accountant has full access
Once you find a small business accountant in Melbourne who gets your startup and everything it stands for; you need to give them unlimited access to your accounts.
They need to know everything that happens finance-wise in your startup if they’re going to help you achieve your goals.
For this to happen, they need to have access to everything.
It’s scary handing over that much access over your baby – we get it. Trust us, though; it can save you a lot of trouble later on!
Essential tips for managing the financial growth of your business
As your business grows, adding clients, projects, products and employing more staff, the financial operations of your company become more complex. Growth spurts are exciting times, but to avoid the pitfalls, it’s essential to be on top of managing the financials. Here are the most important aspects to consider about financial growth and ensuring the health of your expanding business.
As your customer base, internal teams and supply chain evolve, updating your financial system to manage the processes is critical. Older systems and out-of-date software are often the hidden handbrakes impacting a company’s economic speed.
Updating to a fully integrated, cloud-based financial management system, such as Xero, offers a wide range of benefits. It enables you to link all of your business data in a central location from which you can access the latest information and reports daily. You can also distribute information automatically, eliminating the need for multiple emails and phone messages, thereby saving time and increasing productivity.
Staying one step ahead of market trends and costs
With technology that tracks sales and expenses daily, you gain the insights you need to pinpoint unnecessary expenses or outgoings, streamlined with better pricing from suppliers. You can also highlight those products or services giving the most substantial returns and construct your marketing plans accordingly. Accessing and analysing this data daily means you can react to market trends with maximum speed and efficiency.
Many companies rely on antiquated spreadsheets for their accounting, and these are both time consuming and prone to errors. An automated system that compiles your financial data and makes it available digitally to stakeholders will not only improve workflow it will also increase your efficiency in budgeting, planning, and forecasting, three of the most vital components to a company’s fitness and future prosperity.
Don’t overlook the importance of efficient invoicing.
Cashflow is at the heart of a company’s financial health, and it’s essential not to overlook the prominent tools, such as invoicing. View your invoicing as a critical resource, the same as you would a valued supplier or business tool. When a business is going through a growth cycle, it’s not uncommon for some tasks to take longer due to the extra workloads.
Ensure your invoices go out on time with clear terms for the timing and the options for payment. To ensure your invoices go out on time, it’s essential to have a schedule and a system that is fast and accurate. For late payers, make sure you have a friendly, follow-up reminder process in place.
A business growth strategy. Do you have one?
Have you ever wondered just how to develop a business growth strategy?
A business growth strategy is required for your business to be able to survive and grow.
Most companies that begin enthusiastically close within the first five years, and very few manage to survive. Why do you think this is? The reason is straightforward. Companies do not draft tangible growth strategies or fail to execute them.
As the owner of a small/medium business, you need to start slow but proceed steadily, taking on challenges and tapping on opportunities all the way.
We have compiled the best tips to help you develop your business growth strategy… Read on.
Develop a value proposition
Customers today are smart enough to know they need to look at the value you are providing. To attract potential customers and survive in the market over the long term, you need to stand out from the rest.
Simply said, establish a value proposition that details the unique benefit associated with your product or service. Ask yourself why people should do business with you, and use your answer to convince your customers.
Identify your customer
You can develop a successful business growth strategy only when you can determine who your ideal customer is. You started a business with a specific audience in mind.
Are you catering to those people?
Are your products developed to align with your audience expectations? If not, your business needs to be reviewed.
Identify your customer and adjust your business accordingly.
Define key indicators
Identify the key areas that affect your business. Dedicate more money and time to those indicators that primarily play a role in your business growth.
Accounting, for most businesses, is a crucial indicator. Low-key areas need to be focused as well, but they can come later in the priority list. If changes are required, ensure to make them measurable.
Otherwise, you’ll have no way of determining their effectiveness.
Check out your competitors.
When developing a business growth strategy, take a look at your competitors. Are they doing better, or is your company having an edge?
If they are excelling, they are probably using alternative ways to catch the attention of your audience.
Try to position yourself differently and see how it works.
Identify your strengths and weaknesses.
Focus on your strengths and weaknesses when developing a business growth strategy. While you can use your powers to penetrate deeper into the markets, you can work on weaknesses and improve on those areas.
If you are already in the growth phase, consider expanding to the other horizons.
Hire the best talent
You need to have highly inspired people on board if you need to connect with your customers effectively.
Hire a team that precisely understand your company’s value proposition and pay them competitive salaries.
Developing a business growth strategy will need serious efforts. Since the markets are dynamic, you cannot follow a single system all the time and expect success. You need to adapt to the changing conditions to ensure sustainable growth.
Take one step at a time since each step involves risk and uncertainty. Take market feedback and make changes where necessary. Additionally, you can use data from your key indicators to draft personalised growth strategies.
Grow Your Business
Does your business show consistent growth and increased returns? Is your business actively creating a better lifestyle for you and your family? A successful business does precisely that – it provides the time and money necessary for its owners to achieve their lifestyle goals.
Sadly, yet unnecessarily, many businesses are a burden to their owners, returning very little by way of income, work satisfaction and a healthy work-life balance. Spiralling debts, poor return on investment, unreasonable working hours and an over-stressed owner are symptoms of a business that needs help.
To help you achieve all you want from your business, Bookkept will conduct comprehensive assessments and provide you with detailed feedback and a workable strategy for taking your business to the next level. Our personalised, collaborative processes, combined with extensive knowledge and experience across various industries, translate into a market-leading edge for our clients.
We have found even the most successful businesses owners are open to improving their bottom line by employing a professional to assess their enterprise objectively. At Bookkept, we certainly believe in the adage “If it ain’t broke, don’t fix it…”, but our investigations usually uncover innovative ways of streamlining and simplifying a business’ financial and operational functions.
What is there to lose?
A poorly performing business! If you’d like to:
- Create a business that runs efficiently in your absence,
- Increase your net return,
- Retire within five years,
- Achieve a work/life balance of your design, then Bookkept can help.
Our business improvement strategies are dynamic, allowing your business to grow and evolve as we help you reach your goals.
Improving profitability & cash flow
Many business owners cast their nets too widely to find customers, which wastes enormous amounts of time and money. Many business owners are offering goods and services that aren’t pulling their financial weight. Many business owners maintain poorly structured accounts receivable and payable systems, which impede cash flow.
We could go on…
Only an objective, experienced professional knows what they’re looking at when they assess the profitability and performance.
How can I benefit from a business assessment?
Our professionals can help with a range of strategies that can dramatically improve mediocre fortunes, or sometimes even a terminally ill business. Our assessments can also streamline successful interactions with our objective and workable strategies to improve performance. The keys to unlocking the success lying dormant in your industry are many and varied, but include:
- Stabilising cash flow
- Assessing long-term profitability
- Analysing management structure, processes and administration
- Establishing an accurate market position
- Assessing accounts payable and receivable policies, to name but a few.
Helping you improve your business’ profitability and cash flow doesn’t stop when we’ve conducted our assessment. Our comprehensive plan will provide you with:
- Knowledge of the critical areas you need to focus on for improvement,
- Detailed action plans
- Monitoring of your progress as you implement change and
- Assistance with implementing new systems and processes.