Accounting basics for startups

Accounting is the part and parcel of any business entity. It is important for every business organization to have robust accounting system in their organization so as to get the true and fair picture of their income and expense position.

Startups are also required to maintain up to date books of accounts epitomizing their financial position and other important details. Running a startup can be a hectic enough before even considering financials but neglecting accounting practices cause great harm to the business.

Here are some of the accounting basics for startups that will put them in a better position to transition over towards the dedicated accounting services in Delhi when the time comes:

1. The type of records to be maintained: It is important for the startups to keep a running and up to date records of all the expenses, deductions and credits to file a tax return accurately. This approach includes business receipts, bank statements, credit card statements, invoices, payment proof and other important records.

2. The kind of accounting methods that should be used: The startups have to decide upon the two primary accounting methods — cash basis and accrual basis of accounting. Cash basis is more straightforward and tracks income when it is received and expenses paid. Accrual on the other hand tracks expenses that are earned through contracts or invoices before the actual receipt or payment of money. It is advisable for the startups to hire the professional accounting services in Delhi who will guide them with the kind of accounts that is beneficial for their business.

3. Bank statement: With the advent of online banking, bank statements are a thing of the past. However reconciling the bank statement is still important. Reconciling your statements each month allows your general ledger balance to your bank balance account and find any possible errors in banking that would have gone unnoticed if the statements are not reconciled monthly. Professional accounting services in Delhi will help the startups to reconcile your bank statements and help you find any possible errors.

4. Payroll: If you have even one employee you will need to properly track payroll. This includes everything from managing employee personal records to retaining their time records. Good accountants help you manage the payroll of all your employees accurately.

5. Startup costs: It is important for the startups to keep the track of all their startup expenses. They should make sure that the payment received from their customers is adequately tracked and a proper and up to date record of all the payments along with their invoices should be properly maintained.

6. Financial statement: It is important for a startup to keep the record of monthly or quarterly financial statements, depending on your business, A good accountant will help you prepare and maintain the financial statements. The accounting firms will make sure that your ledger balance matches with the bank balance.

As a startup owner it is up to you to decide whether you want to bear the challenge and additional burden of maintaining accounts or want to hire some help. It is imperative that you hire a good accounting firm in Delhi so that you can manage your book keeping and accounting and also get professional advice in your business and finance related matters.