In a startup company, you are insanely busy. With so much going on, you can become blind to how you are spending company money. This is the second of a two-part series (read part one here) on bookkeeping techniques that will start you off on becoming a black belt in managing money.
Bookkeeping, very simply, is the recording of a company’s financial transactions, which include sales, purchases, income, and payments. Here are some tips on how to get it right the first time.
5) Manage small ticket expenses using cards.
Card companies do the work for you by producing itemised statements that list the item purchased, date of the transaction and total amount spent. Use the credit cards to help you manage spend, but not as a means to spend more.
Cabcharge is another indispensable card to carry. It is easy to share with staff and means you won’t be late to a meeting because you didn’t carry cash to pay the driver. Try to make one card your primary method of payment and use a different card for personal and businesses expenses. If you mix personal and work expenses, you create more headaches for a professional bookkeeper to resolve later.
6) Manage large ticket expenses by saying ‘no’.
Delay purchases of computer equipment, and prefer leasing over purchase. Although computer equipment appears as an asset on the balance sheet, computers and furniture are in fact liabilities. They need to be fixed when they break down, carted when you move office, and thrown out when they become obsolete.
Service-based businesses should be building cash at bank, and reinvesting these cash reserves to buy people and ideas, or return money to investors. Skip the expensive gadgets and furniture. Trust me – you can live without an iPad.
7) Time wasters disguised as freebies.
Beware of getting things done for free from friends or family. It could be a time sucker in disguise. Free often comes at cost of compromising quality. You don’t have time to do things twice. If you want to accept help from friends, set a quality threshold you need to achieve, and be prepared to pay a small sum to ensure you exceed the threshold.
When you are starting out and learning, pay more money for services and be glad for the time it will save you later.
8) Time to outsource bookkeeping
Warning light should go off when you realise the monthly accounts are consuming too much of your time. Some signs include hiring more staff, exceeding $20,000 in monthly turnover, and fines from Government for late submissions. In these conditions you have a case for outsourcing bookkeeping to a specialist firm.
Training package promotion: Futurebooks is offering SGentrepreneur readers a 15% discount on half-day bookkeeper trainer sessions. Offer available until 22nd September 2011. Limited to the first 20 persons. Inquire here.
Anthony Coundouris is the founder of Futurebooks – a business offering affordable bookkeeping,business planning and business brokering to start-up companies. Anthony has a decade of experience in all walks of marketing. Collectively he has helped dozens of corporate firms build subscription models and develop an online positioning, including Caltex, Jaguar, SAS, ING Direct, FoxTel, salesforce.com, Telstra,Proctor and Gamble, Google, salesforce.com, Kraft, Citibank and American Express.
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