Recently my partner and I realized our accounts are very messy. We have been procrastinating far too long (this is the reason there has not been a post here for a long time).
We hear it all too often about how start-ups should keep the finances clean and in order but it never hits you till you are in the midst of it.
We hear it all too often about how start-ups should keep the finances clean and in order but it never hits you till you are in the midst of it.
We now understand how crucial it is for a start-up, or a company of any size, to maintain its books in order. This is all the more for a PTE. Juggling between a day job and a business on the side, its been very convenient to put off doing what I call “non revenue-generating” tasks. Now that the business has stabilized reasonably, I find that we do not have the accounts under control.
Issues we currently face include, no paper trail of income and expenses, lack of clarity over our actual cash balance, unsure of our accounts receivables and payables and inability to confidently make forward financial decisions.
Having (almost) sorted things out, here’s what I think a PTE should do to keep things in order:
1. Do accounts every week (make sunday mornings “accounts session”. bring your stuff out to a cafe, sip a coffee and clear all those receipts for the last week)
2. Bank-in all income without netting-off any expenses paid off. (major mistake we made, resulting in a very very very very very messy situation)
3. Write checks for every single cash flowing out of the business. (checks are an amazing tool for tracking cash flow!!!)
2. Bank-in all income without netting-off any expenses paid off. (major mistake we made, resulting in a very very very very very messy situation)
3. Write checks for every single cash flowing out of the business. (checks are an amazing tool for tracking cash flow!!!)
Write in to share other suggestions to better manage finances.
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