A less than optimal payroll and accounting system within your start-up business will spell financial disaster and business failure within the first few months of your company. Accounting and payroll rules and regulations must be highly respected. The cash flow within your organization must be managed to the utmost if you are going to run a successful company and rise to the level of your competitors.
To gain control of finances, a new business must be able to distinguish between two types of spending: required and optional.
Required spending is essential for the smooth operation of your business.
People and Services You’ll Need
- An effective business plan
- An accountant
- Legal representation
- Tax professional
- Marketing and branding
- Technical support
Office Equipment and Items You’ll Need
- Office Furniture ( comfortable chairs, file cabinets,
- Desktop computers and monitors
- Printer and photocopier
- Word processing software
- Accounting software
- Website building software
- Internet connection
- Inventory management software
- Answering machine service
Required spending must be considered before any optional spending is considered. If this type of spending is ignored, then your financial troubles will continually grow within the organization.
Optional spending can be ignored until your revenue increases. Expensive technology is a good thing if your company can afford it. But most start-ups must exercise smart spending.
A Well-Balanced Financial System
The accounting and payroll system within your organization should be highly effective if spending and expenses are going to be under control. Disregarding this system and over spending on high priced equipment and services will put tremendous stress on payroll and accounting department.
You must be able to abide by the rules and regulations of accounting and payroll. Employees must be paid for the time they worked and the proper taxes and deductions regulations must be met.
I once worked for a company which invested in expensive equipment instead of allowing an affordable outsourcing service to take care of the matter.
As a result, other employees and I weren’t paid on schedule. In fact, there was no money in the budget to even pay taxes. This situation happened repeated because the company didn’t value the importance of a strong accounting and payroll system. The outcome is obvious. Auditors discovered corruption and the company soon shut down and was charged with several legal violations.
Start-up organizations must take their accounting and payroll systems very seriously. These systems are there to measure spending and to hold the organization accountable for how it spends its money.
Acknowledge Your Budget
The best way to deal with unnecessary spending is for a company to acknowledge the budget each time the company gets ready to spend money on various services and equipment. As the leader of the company, you should connect with your accountant and go over the budget step by step before making any major purchases. Well-established organizations do this on a regular basis.
Benefits of Financial Control
When the financial affairs of a company are in order, a company can operate smoothly and efficiently. It is free to concentrate on attracting and fulfilling the needs of customers. When a company knows where its money is going, it is incomplete financial control and can market its products or services effectively. Such companies not only increase their revenue but also grow their customer base as well.
A smooth running organization can keep the customers satisfied, but not only this. A well-financially organized company will also keep its employees as productive and satisfied as possible.