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expenses helps you to identi- ceivable and accounts payable
fy areas where you can save to ensure that your business
money and cut costs. You can is not running out of cash. If
use accounting software like you have a cash flow problem,
QuickBooks or Xero to track consider invoice financing or a
expenses and generate finan- line of credit.
cial reports.
Use Cloud-Based Ac-
Separate Personal and counting Software
Business Finances Cloud-based accounting
It is essential to separate your software is an excellent tool
personal and business finances, for startups. It allows you to
even if you are a sole propri- access your financial data from
etor. Open a separate bank anywhere, collaborate with
account for your business and team members, and generate
use it for all business transac- financial reports in real-time.
tions. This makes it easier to Popular cloud-based account-
keep track of your business ex- ing software includes Quick-
penses and helps you to avoid Books Online, Xero, and
mixing personal and business
finances. FreshBooks.
Stay Compliant with Tax Laws
Hire a Professional Ac- As a startup owner, you need
countant to stay compliant with tax laws
Hiring a professional accoun- and regulations. Make sure
tant is a wise investment for you register your business with
startups. An accountant can the appropriate government In conclusion, managing
help you manage your finances, agencies and file your taxes finances and accounting for
keep your books up to date, file on time. An accountant can startups is critical for success.
your taxes, and provide finan- help you with tax planning and Creating a budget, tracking
cial advice. If you are unsure ensure that you are compliant expenses, separating personal
about how to manage your with tax laws and regulations. and business finances, hiring a
finances, hiring an accountant professional accountant, mon-
can provide you with peace of Monitor Financial Ratios itoring cash flow, using cloud-
mind and ensure that you are Financial ratios are essential based accounting software,
compliant with tax laws and for analyzing your startup’s staying compliant with tax
regulations. financial performance. Com- laws, and monitoring financial
mon financial ratios include ratios are essential financial
Monitor Cash Flow gross profit margin, net profit management practices that
Cash flow is the lifeblood of margin, return on investment, can help you keep your startup
any business, and startups and debt-to-equity ratio. Mon- finances in order. By following
are no exception. As a startup itoring these ratios can help these practices, you can make
owner, you need to monitor you identify areas where you informed financial decisions
your cash flow regularly. Keep need to improve your financial and grow your startup success-
an eye on your accounts re- performance. fully.
IN THE MIND OF STARTUPS 43
