The clock is ticking to file your taxes on time, and, if you’re like most, you likely grumble your way through the entire process. Keeping your financial house in order doesn’t have to be such a burden (or something you pay attention to once a year). We sat down with CEO & Founder Kenji Kuramoto of Acuity, which provides technology-enabled accounting solutions for startups.
Kuramoto kindly bestows 20+ years of his financial facility upon us, which we have shaped into six financial tips to manage your startup or business, so you’re not left in the same sad state next season.
Business Rules for Finances, So Finances Don’t Rule You
1. Ditch the Excel Sheet for Actual Accounting Software or Services
Whether you’re paying for packages from finance experts at Acuity, which specialize in bookkeeping for startups, or easing your way into a more novice software like Quickbooks Online, the best thing you can do for yourself is pick and stick with whatever you choose. Entrepreneurs often push off the bookkeeping side of their business until it’s too late. Find a solution that works for you. There are technology tools to help.
2. Let the Ease of Automation Do the Dirty Work for You
The beauty of technology is that, nowadays, even your company’s bank account expenses can flow straight into an accounting tracking software like Xero. That means everything you’ve spent is right there waiting for you. Go on, let that pen dry out. You don’t need it to track your finances the old fashioned way anymore. Manage a credit card that automates your business spending.
And if you don’t have a separate account for your startup, do yourself a favor and get one, stat. Many entrepreneurs get themselves into trouble by double-dipping. To quote Peter Venkman, “crossing the streams is bad” and giving yourself the headache of assessing a business expense versus a personal expense is a giant waste of your precious (empire running) time.
3. Bookkeep, Bookkeep, Bookkeep!
If you decide to take the DIY route then make sure you have a system you can keep up with…or pay the extra bucks to hire someone to do it for you – and no, we’re not talking about your spouse, BFF, or mom.
4. Procrastination is Thy Enemy, Not Thy Friend
While it’s easy to let your daily financials take the backseat to your more important entrepreneurial pursuits, waiting until tax season to look at your startup finances is a huge mistake. This is a year-round commitment, y’all!
5. Experience a Year of Losses? File Anyway!
Even if your startup is meager and you didn’t make any money, don’t feel like filing a return is unnecessary because the only person you’re shortchanging is yourself. Uncle Sam may still penalize you, plus there are some sweet tax credits you may qualify for.
6. Wow Investors with Your Financial Finesse
Keeping up with your finances like Andy Dufresne (minus the falsely accused prison time thing) will likely wow future investors when it’s time for them to place a stake in your startup. They’ll be impressed that you’re not taking a ‘back of a napkin’ approach.
Written by Kristyn Back based on an interview by Kiki Roeder.