Unless you're an accountant, the word "accounting" probably strikes fear in your heart -- or a little bit of nervousness, at least. For young entrepreneurs, the feeling is probably amplified. After all, poor bookkeeping out of the gate not only can set a project back in the short term, it can really come back to bite you over the long haul. Even young entrepreneurs get audited, you know.
That said, it is possible to avoid the ire of the IRS. Here are a four accounting tips to start your business by:
- Start off on the right foot. In the same way that you go through your email every morning, or in the same way that you do an inventory review each week, make your business accounting a habit. Set a recurring alarm on your calendar: "Review books!" The frequency is up to you, but you should carve out some accounting time at least once a month, if not more.
- Learn the lingo. The cumbersome terminology of accounting is sometimes the biggest hurdle. Chart of accounts? General ledger? Cash vs. accrual? Accounting lingo isn't natural -- and ignoring what's what won't help you. So take some time to understand the basics. The U.S. Small Business Administration's Small Business Development Centers are a good place to start, as are accountancy groups like the American Institute of CPA's and the Association of Chartered Certified Accountants.
- Find software that fits you. Find the accounting software that's right for you. Don't simply opt for what your friends use. If you're always at a desk, a desktop solution, like QuickBooks Desktop might make sense. If you're like most entrepreneurs and on the go 24/7, something mobile like Xero may make more sense. If you're running your business from your iPad, go with a cloud-based accounting software package like Easy Books or Kashoo, which both offer iPad apps.
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