Your Startup's Top 3 Most Trusted Accounting Allies When you're first starting up, making a few accounting allies can help set you on the right track to have hassle-free financials.
By Amrik Randhawa Edited by Dan Bova
If you're not an accountant then, chances are, you're probably not great at accounting. And that's thoroughly OK. If you were great at accounting, you'd be an accountant, not a burgeoning entrepreneur. But, as I always say, any new business lives and dies by sound recordkeeping.
Since going it alone might not be the best option -- especially as you gain momentum, grow and scale up your business -- here are three allies you should have in your corner:
A Lawyer
While a lawyer doesn't play much of a role in your company's books, he or she will be helpful with the foundational elements of your business -- namely, which kind of business entity you choose. Your industry and your future plans will impact the kind of business entity you should form (i.e., C corporation, limited liability corporation, S corporation, etc.)
Related: Why Mid-Year Tax Reviews Are a Must for First-Time Entrepreneurs
And as there are tax implications of this selection, so too are there accounting implications. Thus a good lawyer is an early accounting ally. Connect with other startups or local groups to find some solid recommendations, as there are a number of small law firms that specialize in startups.
An Accountant
Surprise, you need an accountant. This isn't a recommendation to offload all of your company's financial activities to a service provider. You still need to be involved in your company's books -- especially in the early days, when it's perhaps just you.
Related: 4 Start-Up Accounting Tips for the Young Trep
But an accountant will surely help you come tax time. Plus, they're often chockfull of pertinent, helpful information. And the fact that in time they'll likely develop a deep knowledge of your company's financial picture and possibly act as a trusted source of business advice can't hurt either.
Some Software
Sure, you could do your books by hand. You could even do them in an Excel spreadsheet. But seriously, that could get complex. So selecting the right type of accounting software is a critical business decision. Get too much, and you'll find yourself overwhelmed. Get too little, and you're not going to be able to extract any tangible insight as to how your business is actually doing. Web-based software (instead of desktop) makes a lot of sense for entrepreneurs in the tech space.
Related: 5 Ways to Set a New Company Up for Success
But think about your own work style. Are you a desk jockey? A desktop package would do the trick. Or are you on the road, in and out of new business meetings half the month? Then cloud-based accounting software that you can access from your smartphone or tablet might make the most sense.
Who or what were your biggest start-up allies and why? Let us know in the comments section below.
