6 Accounting Tips for Tech Companies to Stay Above Board
In the fast-paced world of technology, it’s easy for even the most diligent businesses to fall off balance. Whether it’s because you’re juggling several projects at once or you’re a new startup that hasn’t quite mastered your processes just yet, staying on top of your accounting can be challenging. In this blog we will discuss accounting Tips for Tech Companies and how they could stay above board.
Let’s face it – bookkeeping, Annual Accounts, VAT, Payroll and Tax Returns aren’t exactly the most thrilling parts of a Tech business. However, ignoring these essential tasks can have serious consequences in the long run. If you neglect your company’s (financial and Tax) health, you risk putting yourself at risk when things get tricky down the road.
Why is Good Financial Health Important for Tech Companies?
We’ve all heard the term “health and wellness” a thousand times, but what does it actually mean? In the business sense, financial health refers to the state of your company’s finances and its Tax Compliance health – everything from your cash flow to your company’s net worth and your tax affairs. And while it might not be the most exciting topic, it’s crucial that you’re on top of your company’s (financial and Tax) health at all times. If you’re not careful, you could end up putting your entire business in jeopardy.
Basics of Finance and Accounting for Tech Companies
There are a lot of different accounting standards and practices out there, which makes it tricky to understand exactly what you’re looking at when you open that monthly financial statement. To make things a little easier to understand, we’ve broken down a few of the basic accounting principles for tech companies: – What is Cash Flow? Cash flow is one of the most important factors in your company’s financial success. It refers to the rate at which your company is actually generating and using cash. – What is a Balance Sheet? A balance sheet is an important tool to help you understand your company’s financial standing. It will let you know your total assets, liabilities, and equity. – What are the Differences in GAAP and IFRS? GAAP stands for “generally accepted accounting principles,” and it’s the set of standards used to record and report financial information. IFRS stands for “International Financial Reporting Standards,” and it’s a set of accounting standards used by many countries around the world. We recommend using cloud-based accounting software and Monthly Reporting tool, that gives you access to your business affairs 24/7.
Don’t Forget to Plan & Track Your Marketing Strategies
Marketing is an essential part of tech growth, but it can be tricky to track ROI. With so many different channels and strategies to choose from, it can be easy to lose track of which ones are really working. To make things easier, you can keep track of all your marketing efforts with a marketing calendar. This will help you stay organized and make sure you’re not spending too much time on any one task. We could help you link your marketing strategies with your accounting software so you could see the result of each marketing effort translated into financial numbers. We could also set up the budgets so that you could compare the actual results with the results.
Stay on Top of Your Employee Relations
We’ve all heard horror stories about high-profile CEOs getting sued for unpaid overtime. While these cases are rare, they do happen. To make sure you’re not putting yourself at risk, you should always be sure to stay on top of your employee relations. Keeping thorough records of your employees’ working hours, salaries, and benefits are all important factors in managing your employee relations. We could recommend and link your payroll and HR records with your Accounting software to bring efficiency into the business. This will help avoid any costly mistakes.
Don’t Let Receivables Turn Into Bad Debt
A lot of tech companies are cash flow-driven, which means they rely on their customers to pay them upfront. However, as anyone in business knows, this isn’t always the case. There will be times when your customers might not be able to pay you back when they’re supposed to. When this happens, you have a few options. To make sure you don’t let a few bad debts turn into bad debt, you should make sure to always keep track of your company’s receivables. Keep track of each customer’s payment schedule, as well as the date their contract expires. This will help you stay on top of your receivables and make sure you’re not missing out on any payments you’re owed.
Accounting doesn’t always get the attention it deserves. Most business owners will spend more time strategizing about how to grow their company than how to keep track of their finances. However, it’s crucial that you’re always staying on top of your accounting. Otherwise, you run the risk of putting yourself at risk financially and with tax exposure risk. By staying on top of your cash flow, balancing your books, and tracking your marketing efforts, you can make sure your company is always ahead of the game.