5 Accounting Obstacles for Startups - And How to Overcome Them

Managing your finances and proper bookkeeping is essential for any business. It is important to implement good practices right from the start. Financial issues and cash flow problems are one of the main reasons new businesses fail.

Accounting may seem boring, time-consuming and a lot of hard work. There are many tools available to help though. So even if your startup cannot afford a dedicated bookkeeper, there ways of keeping finances organized will help your business run smoothly.

Don’t let your startup stumble at the first obstacle. There are many tools available to help you overcome these obstacles and manage your business accounting with ease.

Here we look at some common accounting issues and the tools that can help.

1. Cash Flow

Keeping track of the cash flow and expenses is essential for any company. Managing your money is especially important for startups, who have limited funds. You need to be aware of all transactions so you can understand where your money goes and spot any issues before they get out of hand.

Tracking all the money that goes in and out of your business can be complicated and time-consuming. Using accounting software such as Quickbooks can help automate the process to save time and enable you to effectively oversee the financial health of your business.

Quickbooks has become the industry standard for managing finances. It integrates with your bank accounts to efficiently keep track of all transactions and save you time. The 3 choices of plans, plus a large range of features make it suitable for many startups, small businesses, and entrepreneurs. There are also many other online tools that can easily integrate with Quickbooks so you can create the perfect system to suit your needs.

Hosted in the cloud, Quickbooks is easily accessible from various devices, wherever you are. It is a full accounting package that can help keep your financial records up to date. Using Quickbooks diligently will give you an easily accessible overview of your business financials. This can also prove useful in the future for funding opportunities requiring verifiable financial records.

2. Managing Payroll

Payroll and tracking employee work hours can be a headache for startups. If there are errors or legal mistakes in the payroll management though this can lead to fines from the IRS or tax office. Thus many startups and small businesses find it worthwhile to invest in a payroll service.

Online accounting systems often have payroll services integrated into the software. There are also intuitive payroll services such as Gusto that provide payroll, benefits and HR support for a monthly fee. Gusto simplifies and automates payroll and provides expert support regarding benefits and HR for your business.

Having the right payroll system in place will ensure you avoid any legal or tax issues and make things easier as your business grows.

3. Expense Tracking

Today tracking expenses does not mean you have to store all your receipts in a box to be sorted later. The process can be streamlined with tools such as Expensify. Now you simply need to take a photo of the receipt and it will be uploaded onto your Quickbooks. Making expense reports even easier.

Features such as detecting duplicate receipts and calculating current exchange rates make Expensify even more useful. It is compatible with Quickbooks and can automate the whole expense tracking process. Offering a simple way for managers to approve teams expense reports and team members to add receipts. Which provides an easy and efficient way for startups to record, categorize and keep track of all expenses.

4. Billing and Invoices

Professional invoices and a simple, easy way for clients to pay for your products or services is essential for any successful startup. If you are unable to receive payments efficiently this will greatly affect your business. A professional invoice and payment system adds credibility and is more likely to encourage customers.

There are various tools available to help create invoices. You can create your own with the help of templates. Or if you want it to look more professional and also make use of tracking and inventory services, tools such as Sage Business Cloud Accounting can be very useful.

With Sage, you can easily create invoices, estimates, and quotes and it can connect to your bank to check for payments. Sage also offers ways to track inventory and control stock. With a payment system able to take payments from customers directly it can offer a complete solution to suit your business.

5. Tax and VAT

Taxes and VAT can be confusing if you are not familiar with all the requirements. It is best to get professional help so that you can ensure everything is in order and that you make the most of potential opportunities. There may be some benefits or schemes that you are unaware of but that could affect your tax rates save your business money.

Many of the online tools mentioned above can help with filing taxes. Using them to manage your finances and keep your accounting up to date will help when you need the information to file your taxes.

If you are looking for an all-in-one accounting service that can help with managing your finances, payroll and tax prep services Bookkeeper.com is a great solution. They provide bookkeeping services, with additional extras including tax preparation and planning. Their professional team includes accountants and tax specialists, who can help with all your questions and tax preparation needs.

Managing the financial side of your business does not have to be a headache. Setting good practices in place from the start, and using tools to automate records and tracking processes will make managing your finances so much easier. You can choose between all-in-one solutions that help with everything from bookkeeping to taxes. Or use specific tools to help with certain processes such as payroll or invoicing.

Accounting can be boring, frustrating and time-consuming for many startups. But effective time-saving solutions are available online to suit all types of businesses. So there is no need to let accounting obstacles hold you back.