A Beginner's Guide to Accounting and Bookkeeping for Startups

One of the best things about running a startup company is the thought that your seemingly tiny idea has the potential to become a great business opportunity. Launching a startup business requires a lot of bravery, grit, ambition, patience, passion, and organization — without these, you're setting yourself up for failure. 


However, aspiring start-up owners also need to learn how to manage their profits and expenses to move forward. Part of the job is to focus on your finances and generate leads and customers, that’s why creating a dedicated accounting team is essential because a streamlined accounting system keeps your finances in check throughout your growth. 


Thankfully, reliable bookkeeping services in New York, such as Totally Booked, can help you with your startup's financial needs by eliminating your stress and dodging financial issues you may encounter due to disorganization. 


Even if you get credible accountants and bookkeepers to help you with your finances, it pays to know what really goes into accounting and bookkeeping for startups. Keep reading!


Why Is Accounting So Important for My Startup?


For any business in any phase of growth, accounting is crucial. Your work doesn't end after you've gotten your idea off the ground and established your business structure; you also need to figure out logistics and think about accounting. 


Money is what drives your startup's success, and for this reason, you need to manage your finances as it plays a vital role in your company's growth. Here are some notable benefits of setting up your accounting strategy during the startup phase of your business:


  • Adequate reflection of your financial position;

  • Optimal financial organization;

  • Increased efficiency in operations;

  • Higher chances of receiving financing from investors;

  • Fantastic outlook for your business's financial stability;

  • An organized and detailed record of financial history;

  • Better overview and tracking for debts.


However, when you fail to implement proper accounting and bookkeeping, your startup may deal with adverse consequences, such as:


  • Difficulty in forecasting business financial trends;

  • Uncertain financial position;

  • Inability to provide detailed financial information to investors;

  • Difficulty in securing funding;

  • Inaccurate financial history;

  • Higher chances of getting issues with the IRS and other agencies.


For this reason, it's important to seek help from accounting and bookkeeping services in New York to make this seemingly intimidating task a priority from the beginning stages of your business.


Accounting and Bookkeeping for Startups


Many rookie businesses have the common misconception that bookkeeping and accounting are the same; however, both are actually quite different. Although both are critical in maintaining your business's financial health, they have distinct characteristics and areas they focus on. 


Bookkeeping refers to the day-to-day tracking of your startup's finances and the maintenance of your financial records. Bookkeeping services are responsible for collecting and recording all invoices and receipts from clients, suppliers, bank accounts, and more. 


On the other hand, accounting refers to the analysis of the health of your business's finances. Your accountant is responsible for reviewing all your financial reports and noting their accuracy. Doing so will ultimately help your startup stay on budget and ensure your business is complying with proper financial reporting. 


How Do I Set Up Accounting for My Startup?


Here's a quick overview of how you can set up your startup's accounting strategy so you can have a better overview of your financial position:


Step 1: Open a business bank account for your startup.


Step 2: Track all your sales and expenses following proper bookkeeping techniques.


Step 3: Implement a payment system and establish a process to keep track of your metrics.


Step 4: Set up an efficient payroll system.


Step 5: Get assistance from accounting and bookkeeping services.


Step 6: Know your business's tax obligations.


The Bottom Line: Set Your Business on Solid Ground by Prioritizing Accounting and Bookkeeping 


Every startup owner's time is limited, meaning you have little-to-no room to make financial mistakes as it can affect your business's growth. By getting accounting and bookkeeping services, you'll be able to manage all your finances that will help you stay financially on track. 


How Can Totally Booked Help You?


Ignoring basic financial duties, such as accounting and bookkeeping, you may put your business at risk of making numerous financial mistakes that can be costly in the long run and could be detrimental to your startup's development. 


Thankfully, Totally Booked can take the load off your back and take charge of your bookkeeping woes. We are eager to help you increase your bottom line by streamlining efficient accounting processes and bookkeeping services in New York. We offer various bookkeeping services, including budgeting, payroll, sales tax, custom reporting, and more. Learn more about our services today!

Kelly Gonsalves