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Startup Bookkeeping: What New Business Owners Need To Know

You’re also responsible for training and managing your in-house team, which requires time and resources. No, bookkeepers don’t need any licenses or certifications—unlike other finance professionals, such as accountants and financial planners. Some bookkeepers may decide to earn optional credentials, such as the certified public bookkeeper (CPB) designation.

The top seven character traits of great bookkeepers:

• In Series A, investors seek a solid business plan to turn a great product or service into a great revenue stream.
• If the demands of startup life mean you don’t have time to learn QuickBooks, or if you’d rather leave bookkeeping to a pro, try Bench (that’s us).
• Proper financial record keeping helps startups manage cash flow, taxes, payroll, accounts receivable, profitability analysis and more.
• Bundle relevant services into packages and offer them to your client that way.
• A bookkeeping business provides financial record-keeping services and payroll management for other companies.

Sales get booked at the time of invoicing rather than when you collect payment. Expenses are recorded when obligations are incurred regardless of when you get billed or pay. You can look at freelance sites, such as Upwork, to see what others are charging for bookkeeping services, but you can also learn a lot by asking around.

Preparing the financial statements

Clients who are happy with your services are more likely to stay loyal and continue to hire you. They also may be willing to refer you to people they know who might need a good bookkeeper. If you’re specifically interested in working as a bookkeeper remotely, establishing a website and social media profiles may be a starting point for your marketing plan. Both can make it easier for potential clients to find you in online searches. You can also leverage social media to build your brand and increase your visibility.

Managing payments and receivables

It might seem a bit strange to use this as a metric because you want to judge candidates on their qualifications. What is Legal E-Billing Still, you need to ensure that everyone likes your accountant as a person and a personality within your company. If you can’t get along with each other and if interactions are awkward, combative, or one-sided, then you won’t be able to establish a beneficial working relationship to push your startup forward. A role that is sometimes overlooked is that of the controller or comptroller. This officer takes the work of the accountant to generate reports for financial compliance and strategy.

We have developed highly automated systems, and our team is experienced handling the nuances of early-stage, venture funded companies. Many companies raise their next round of venture capital based on their revenue growth. Many early-stage CEOs use a variety of dashboards to visualize their revenue.

• In addition to his valuation work, Vikas is actively involved in hiring and training.
• Bookkeeping businesses generate income through multiple revenue streams.
• Analyzing your income statement can help you identify areas to cut costs and improve profitability.
• Accurate bookkeeping also helps you avoid financial pitfalls by spotting potential problems early.
• A startup may need financial statements generated quickly for potential investors.

• For a bookkeeping business, you may also want to include information regarding your niche and any certifications that you have as well.
• Which you decide to hire for your business ultimately depends on your company’s needs.
• If you know this metric, you can run geographical ads targeted in that area, have an office closer to your customer base, and more.
• To learn more about the ins and outs of setting up your own business, check out our small business guide on how to start a business and our guide on starting a bookkeeping business.
• Cloud-based bookkeeping software provides a much better solution designed for the needs of small business.

It’s less complex and more routine, requiring little more than fundamental financial skills in most cases. Best practices will be to do journal entries yourself if cash is tight in an early startup. For newer teams, keeping business expenses low is the top priority. Many small business owners create this statement when investors want to see how profitable the business is. Similar reports that are called profit and loss statements will be made too. The simplest type of accounting for your tax return is cash basis accounting.

It’s the easiest to follow, and your bookkeeping software should be able to handle it. Choosing your business entity and knowing what your accounting methods are will be necessary to your business. Another major step in running a business is having proof of all of your financial records. If the IRS comes sniffing around, you need to prove that your tax return claims are legitimate. It ensures that every financial transaction is recorded, categorized, and analyzed correctly. This not only keeps your startup compliant with tax laws but also provides you with clear insights into your financial health.