Staying on top of your finances is absolutely crucial when running your startup. Michelle Hoffman, Founder and CEO of Hoffman CFO Consulting, an outsourcing accounting support for emerging technology companies, shared 4 tips on how to better manage and track your financials with the Startup Mixology audience on Thursday:
Tip 1: Use an accrual-based accounting system.
It allows you to recognize revenue when earned and recognize expenses when incurred, thereby matching expenses to the same period as related revenue. Quickbooks is always a safe bet but there are other options such as workingpoint.com and opener.com.
If you are using a cash basis accounting system, there are a few thing you must be careful of, as it does not track money owed to you, unpaid invoices, daily merchant account activity, or asset tracking.
Tip 2: Set up a good chart of accounts that syncs with your business model.
This allows you to group accounting transactions into logical categories.
Tip 3: Avoid common payroll mistakes.
Make sure you send payments in a timely manner to stay current on all federal and state tax forms.
If you use a do-it-yourself payroll service, make sure that you know what you’re doing! If you choose to use a full-service payroll company, choose a reputable service.
Tip 4: DC-based companies should check out the DC FR399.
For qualified high tech companies, DC FR399 offers a tax break that could save your business money.