Avoiding the Financial Pitfalls of a Startup

Startups are exciting, and the work is fast-paced! For good reason, everything you do is likely focused on what you know and do best – and not always on your finances. Many entrepreneurs are experts at the products or services they are offering, but need some help when it comes to running a successful business.

It’s easy for the financial component of your business to get away from you quickly and it’s often why new businesses fail. Since funds are not there to hire a staff member dedicated to managing the finances, or there’s a “we’ll get to that later” mentality, things can fall by the wayside – fast.

Here are some common financial and accounting issues new companies face:

  • Bookkeeping has not been done consistently, sometimes not at all.
  • Income taxes have not been paid on time, even after two or three years in business.
  • Payroll taxes have not been paid.
  • Appropriate payroll tax forms have not been obtained from employees or contractors.
  • Expense, credit card and loan record keeping is incomplete.
  • Appropriate bank accounts are not set up.
  • Bank and credit card statements may not be reconciled regularly.
  • Personal and business finances are intermingled.

For some industries, like those in construction for example, there are additional issues that are common including how to correctly differentiate between contractors and employees, job costing issues, and handling payment, record keeping, and tax reporting accordingly.

Perhaps you see your own business in one of these scenarios and here’s what we can do to help:

  • You haven’t been maintaining your books. You have multiple spreadsheets to manage income and expenses or your Quickbooks hasn’t been updated in a long time; bank account and credit cards haven’t been reconciled, loan balances are off, you have several piles of receipts and you just don’t know where to start. We’ll dig in and sort through whatever records you do have and set up or update QuickBooks. We’ll reconcile old bank and credit card statements, determine loan balances, and give you a clean and manageable bookkeeping system.
  • Your income and payroll taxes are lagging. The penalties and fees are starting to add up because you didn’t know which reports needed to be filed and when payments were due. The State and the IRS are sending you notices that seem very threatening, but they’re not very clear about what they want you to do. Do you just pay the amount on the notice or could you owe less because they need a report first? We’ve brought income and payroll taxes up to date even when years behind, ensuring that correct forms are on file, and working with the IRS to abate some of the penalties that had been incurred.
  • Your business and personal finances are intermingled. This situation happens often with startups, and it can be a challenge to set up bank accounts appropriate to the business so personal and business finances remain separate. We’ve helped companies get their business and personal accounts differentiated so your reporting is seamless.

The Minerva Group has over 25 years’ experience dealing with challenges like these. Just as important, we understand how overwhelming it can feel to realize your finances have gotten out of control. Your financial success is our business, and we are ready to help you tackle your toughest accounting obstacles so you can focus on growth! Give us a call or contact us to learn how we can help you.