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Bookkeeping for lean start-ups (Part 1)
FuturebooksJun 13, 2012 12:21 SGT
The accounting industry thrives on entrepreneurs who are not diligent in filing and bookkeeping.
This is the first of a two-part series on bookkeeping techniques for entrepreneurs surviving a lean start-up.
Here are four easy things you can do to cut your year-end bookkeeping bill by 30 percent in your first year of business.
1. Open a corporate bank account
Do yourself and your company a favour. If you have not set up a corporate bank account, do so tomorrow. Open the account, put in 10 grand. Say goodbye to it - it now belongs to the company. Draw down only from this account so you can visually track expenditure every month from a single statement.
By having a single account means you only need to reconcile a single statement. To open the bank account you will need the directors of the business to be present with proof of identity.
You will also need the company MAA and bizfile. We favour Standard Charter and HSBC because of their friendly internet banking interface.
2. Open mail weekly
Collect mail daily but only open it weekly. With a cup of coffee in one hand, sit and open every piece and either throw it out immediately if it's not relevant, or file it in a plastic concertina folder.
A plastic concertina folder costs $10 and has tabs so you can file according to transaction type.
Print out any important receipts from drop box or email - file them as well. Attach sticky notes instructions. Operation takes 15 minutes per week.
3. Pay stakeholders monthly
Set a billing cycle and let your stakeholders (suppliers and staff) know what date they can rely on you to get paid. You will earn the status as a reputable pay master, which will earn you loyalty and favours when you need them.
Be a consistent pay master. If you are consistent, stakeholders will trust you and will stop bothering you with emails and phone calls to get payment. Poor paymasters are deprioritised. Consistent pay masters are prioritised. Practice this disciple and negotiate better payment terms because you have street cred. When you do get an inquiry, ask them to send questions to your finance email address.
4. Pay yourself monthly
Set aside a day somewhere quiet where you cannot be interrupted. Take the month's worth of transactions out from your concertina folder, and place them in piles. Open your cashbook in Excel and key in the month's revenue and expenses. Open your expenses claim Excel sheet and key in expense claim items.
That's it. Do this consistently every month, you can save 30% on your annual cost of bookkeeping. Download template cashbook and personal expense claim forms. Download
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