Bookkeeping for Startups: Everything You Need to Know

bookkeeping for startup businesses

Have accounting and bookkeeping practices that are followed weekly and monthly to set your startup up for success. Enter in all data of transactions, reconcile your accounts, and keeping up on accounts receivable are all ways your business will keep up with accuracy and keep cash in the bank. Double-entry accounting enters every transaction twice as both a debit and a credit.

What to consider when choosing bookkeeping software

Of course, this is a challenging route that not many people will be able to take. If you choose the latter, the profit of your business will be limited to your hourly rate – so, if you earned the average rate of $18.87 an hour, you could expect to make around $49,000 in a year. You could feasibly make a six-figure salary if you work a lot, and you’re an excellent bookkeeper, but ultimately your salary will be capped. Even if you’re meeting with clients every day, it can be isolating if there is no one there to share the burden of your business with. Don’t be shy to reach out to others or ask for advice if you have any doubts or just want someone to talk to. These days you can search for a Facebook group about everything from baking cakes to watching Game of Thrones.

bookkeeping for startup businesses

Get Bookkeeper Insurance

This can help you organize and track the progress of client work and, in some cases, provide a portal to access your client’s books. QuickBooks and Xero offer the best accounting practice management software that’s integrated with their accountant software. Regardless of the type of business you run, all business owners should write a business plan.

  • And luckily, there are plenty of website builders to make creating your website a breeze.
  • The Ascent, a Motley Fool service, does not cover all offers on the market.
  • Bond over the fact you’re both entrepreneurs and willing to do anything for your businesses.
  • To assist you with this decision, I recommend that you get an introduction to the four common business structures by reading our best small business structure guide.
  • Tracking income and expenses can become complicated as your business grows.
  • Comparing fees, features, and accessibility can help you choose the best business bank account for your needs.

Acquiring Clients for Your Bookkeeping Business

bookkeeping for startup businesses

Most accounting software does this for you, so you don’t need to worry about an extra step. Jami Gong is a Chartered Professional Account and Financial System Consultant. She holds a Masters Degree in Professional Accounting from the University of New South Wales. Her areas of expertise include accounting system and enterprise resource planning implementations, as well as accounting business process improvement and workflow design. Jami has collaborated with clients large and small in the technology, financial, and post-secondary fields.

bookkeeping for startup businesses

In fact, bookkeeping today is much simpler and more diverse thanks to cloud accounting. It is messy to procrastinate doing your books until tax season or courting a new investor. If you’re not using checks, keep proof of your payment together with the bill if the payment goes missing. A general business license is essential based on the location of your business and the structure you choose. Do check with your local regulatory bodies to determine if any specific licenses are required. Now you might have a pretty clear idea about how to start a bookkeeping company.

  • All in all, any additional education and certification you choose to get in the process gives you more confidence and reliability in the field.
  • One way to get some knowledge about bookkeeping is to get a university degree in accounting, but that’s not necessary.
  • Starting a bookkeeping business is something you might be interested in if you naturally love numbers and want to break free of the traditional nine-to-five.
  • If the thought of doing your books is overwhelming, you have plenty of other options including enlisting the help of a CPA.
  • If you pay too much, it could take months to get your tax refund—money your business might need to survive.

We believe everyone should be able to make financial decisions with confidence. Starting a bookkeeping business can be a great opportunity to take control of your career. Before diving in, however, Navigating Financial Growth: Leveraging Bookkeeping and Accounting Services for Startups it’s important to understand what’s involved to get your new business up and running. The more prepared you are before launching, the greater your chances of succeeding as an expert bookkeeper.

Do Startups Need Accountants?

The reason is that there are relatively low barriers to entry and with minimum startup costs, you can start this business. This means recording transactions and saving bills, invoices and receipts so you have all the data you need to run reports. Accounting software makes it easy to store these documents and reference them in case of an accounting error or audit. Small businesses often work with tax advisors to help prepare their tax returns, file them and make sure they’re taking advantage of small-business tax deductions. Though you may not work regularly with a tax specialist year-round, you’ll want to connect with one sooner rather than later so you’re not rushed come tax time.

Set Up a Business Bank Account

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