A firm grasp on account management of your new business significantly impacts its growth and success. Failing to understand the dos and don’ts of business accounting can hamper profits and incur high costs. Accounting Mistakes in Startups.
According to a report, only one-third of American small businesses employ an expert bookkeeper. The same report revealed that almost 66% of the business owners have no plans to hire one in the near future.
A vast majority of new business owners prefer to handle their accounts themselves, which is completely fine as long as they know how to go about it. However, many of them attempt to test and trial methods to see which works best without professional help. This leads to erroneous calculations and ineffective bookkeeping.
Without a sound accounting system, foolproof compliance, and disciplined bookkeeping, driving a small business can be challenging.
Therefore, be aware of these four common startup business accounting mistakes when managing your venture’s books and transactions.
Accounting analysis on a laptop screen
Failure to Keep Personal and Business Accounts Separate A primary mistake many small business owners make is mixing personal and professional accounts. They often blur the line between the two types of finances when their business sets its foot in the market.
For example, you head to a supermarket to buy office supplies on your business’s account. But you suddenly see some grocery items on sale, and you pop some of those in your basket.
Activities like these can lead to a drastic gap between your investments and revenue, making it hard to keep track of your business finances.
According to Clutch, more than a quarter of the small business owners don’t have a separate bank account for their business transactions, and that’s not a good move. Mixing the two finances can cause problems when you apply for a business loan or a credit line since you’re then unable to provide an accurate financial snapshot of your earnings and expenditure.
If you’re also using a personal account to carry out business purchases and payments, head to the bank today and apply for a business account today.
Relying on Cash-Based Accounting Although cash-based accounting is a traditional way of handling and managing cashflows, it results in an uneven and erroneous bookkeeping record. You might skip or duplicate a transaction when counting your finances.
Moreover, if you’re dealing with multiple business vendors, you might not be able to keep track of all the receipts and invoices of their record. Cash-based accounting is a short-term and ineffective solution for your business needs. It doesn’t take due diligence and track-recording into account and leads to fluctuations in business inflows and outflows.
While cash-based accounting might seem easy-to-manage and straightforward, consider implementing a system that has the potential to grow. A fully integrated, seamless accounting software like QuickBooks can be your perfect accounting partner! – Read more
In the time of the COVID-19 pandemic, when businesses are trying their best to survive and make most of the situation, a major change has come in all organizations’ operation methods. More and more businesses are going remote and trying to work digitally.
Accounting practices are also in this category, looking for ways to go digital and streamlining their operations. QuickBooks is one of the tools available for businesses to manage their financial data with advanced industry-specific features. However, when hosted on the local system, it lacks the features of remote access and recovery in case of any calamity.
When combined with cloud capabilities, QuickBooks can add extended features to QB, including remote access, efficient file sharing, better security, and more.
Here is how you can leverage QuickBooks Cloud to streamline your accounting practice.
1. Enhanced Security
Since for any accounting practice, financial data is sensitive for the business. Hence, they are generally cautious about sharing the same over the network. With QuickBooks cloud, security is not a concern to be worried about anymore.
QuickBooks Hosting has the latest cybersecurity measures that are updated regularly and managed by cybersecurity experts. The QuickBooks providers know that it is imperative that the client’s financial data is kept secure and ensures regular security patch updates, network monitoring, data encryption, ransomware prevention, and more.
2. Improved Network Quality
Traditionally, in accounting practices, multiple personal computers are all connected to a local server for data storage. Generally, these connections are setup using LAN or WAN. However, these connections are not completely reliable and prone to connectivity issues.
With QuickBooks Cloud, all components can be connected to each other via cloud with access to the financial data from any location over the internet. This also means that there is no need for equipment, computers, and the server to be collocated in an office space. This is especially relevant in the new normal when more and more businesses and workers are opting for work-from-home solutions.
3. Smooth Migration
Making the transition to a cloud server is a tedious task, even more so if it involves financial data. The QuickBooks Cloud providers make sure that the transition of financial data is smooth and stress-free. In addition, transparency is maintained with the authorized personnel of your business.
The providers even provide a transition time when the business accounting practice is assimilated with the new environment. All concerns arising within this time are assuaged, and issues are resolved. With a quick turnaround time for implementation on QuickBooks Cloud, accounting practice can be readily adopted and implemented.
4. Remove Technology Glitches
Ina traditionally maintained system on office premises, it is a daunting task to maintain the software updates to the same version on different personal systems. Also, as the technology grows, software requirements also change, requiring updates in system hardware, affecting the organization’s technology budget. Additionally, personal systems are prone to virus attacks, leading to constant and continuous monitoring of personal systems. These tasks may require a dedicated IT department at the office premises.
With QuickBooks Cloud implementation, the software upgrades and security are managed by the cloud service provider, making sure that the same version of the software is available to all the personnel in the organization and security patches are installed simultaneously. It also helps in reducing the cost of the IT department at office premises.
5. Better Data Recovery
In traditional accounting practice, data backups are taken on external hard drives that need to be secured and stored at a location, either same or different.
QuickBooks Cloud makes it easy to maintain the backup of the financial data, thus making sure that data is available readily in case of disaster recovery. With QuickBooks cloud, you do not have to worry about maintaining external hard disks. The cloud service provider is responsible for managing the disaster backups and restoring the same.
6. Easy Data Management
With traditional accounting systems, the financial data is pulled in and out of the system using spreadsheets. Analyzing these files is a time-consuming task and sharing the files over email and/or file-sharing systems is a nightmare.
QuickBooks Cloud provides the feature of sharing the files to the authorized staff and clients and allows multiple people to work on the files simultaneously. QuickBooks cloud also maintains the different versions of the files and is available for the review of the updates, which is a nightmare with the traditional accounting system.
7. Increased Financial Profits
With the reduced capital expenses and the cost of hardware maintenance at the office premises in the case of QuickBooks Cloud, businesses can increase profits. Your business accounting practice can select from a fixed payment plan provided by QuickBooks Cloud providers in place of fluctuating costs for on-premises deployment.
Also, with real-time financial data available on QuickBooks Cloud, accessed and updated from different locations of the organization, reviewing and making a course correction is a reality, thus saving on expenses and increasing profits.
QuickBooks Cloud storage of financial data allows your firm to plan better financial strategies that help in reducing the expenses and hence an increase in the organization’s profit.
8. Organized Process
With traditional accounting systems, getting real-time updates was not a possibility except when the business only had the office at one location. With businesses expanding to different geographical locations, QuickBooks Cloud provides an opportunity to connect these locations and get real-time updates of the financial data, providing the management a hang of the finances. Furthermore, QuickBooks Cloud provides reports for the clients that can be customized as per their requirements, thus making clients happy. A happy client makes a business successful.
QuickBooks Cloud makes financial data management easy and reliable. It also reduces the cost of the workforce required as financial data is not maintained on business premises. QuickBooks Cloud provides a path to success to businesses in a world that is going digital in the new normal.
Author-Bio: Sharad Acharya is a technical writer at Ace Cloud Hosting. He loves to research the latest technologies and has written articles on the cloud, virtualization, and security. You can follow him on Facebook, Twitter, Google+, and LinkedIn.
For those of you that are experienced website builders, it will come as no surprise to hear that getting your page online is not as simple as clicking a button. There are various processes which have to be taken care of in order for a successful outcome to come to fruition. Web hosting companies are slowly-but-surely becoming highly sought-after, and there is a good reason for this. After all, these types of firms are able to revolutionise and optimise the way that your website operates, and this change can be primarily attributed to the hosting options being offered. Cloud hosting is typically regarded as one of the most exciting prospects in the technical world currently.
Whilst it is true that there are various other options which can be taken advantage of, the benefits of this type of service truly elevate it to another level. Here at catalyst2, we have invested a significant amount of time and effort into refining our cloud capabilities, and as such we are ideally-placed to provide a comprehensive guide to everything that you need to know. If you would like to hear our thoughts on the matter, feel free to continue reading below.
A Brief Introduction to Cloud Hosting.
When it comes to locating a flexible type of server which can be tweaked in a moments notice, and does not force you to break the bank to afford it, the only service that you need to know is that of cloud hosting. At first glance, you may be slightly sceptical of its capabilities, not least because of the amount of media coverage that cyber attacks and hacks have had in recent times. The catalyst2 team are pleased to be able to shed some light on the matter; these packages and plans, contrary to popular belief, feature some of the most advanced security measures. The sensitive information of both you and your clients will be well protected, and you won’t need to lose any sleep over fear of being compromised.
Although you may not realise it, cloud hosting is a relatively simple service – the account manager that you are assigned to will have a control panel, and this can be used efficiently-and-effectively in order to maintain and improve performance levels as-and-when it is required. Should you be looking to transition from an existing arrangement to a package which involves the cloud, you will undoubtedly be glad to learn that the process is not only simple, but incredibly easy.
As you may expect from a system which predominantly utilises the Internet, backups take place on a regular basis. Disaster recovery has become an increasingly prevalent service over the past decade, and this is because the alternative is nothing short of catastrophic. If you were to lose your data, there is no-telling as to how long your website would be down. This, in turn, could lead to you losing business on a daily basis, and cause your revenue and income to plummet simultaneously. Understandably, you will want to do all that you can to avoid this type of situation – this is why cloud hosting comes in tandem with a failsafe that ensures that you won’t have to deal with this scenario. – Read more