Ling Lee
Ling Lee, at Digital Marketing and Personal Branding

Accounting

What accounting systems do I need for a startup?

I have started up my business, but I am not sure what sort of accounting paperwork and systems I need. Although I have some basic accounting knowledge (from uni) I have no idea what sort of documents the Government requires every year, and a limited budget means I don't have the funds to hire a full time accountant for my business.

What do I need to do?

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4 Answers

Neil Steggall

Neil Steggall , Partner at Wardour Capital Partners

I should have stated that as a minimum you need to maintain:-

  • A statement of income and expenditure - P&L
  • A simple statement of assets and liabilities - Balance sheet
  • A record of any bills you owe - creditors ledger
  • A record of any monies owed to you - debtors ledger
  • Bank Statements
  • Bank Reconciliation 
  • An Excel spreadsheet will suffice at a base level.

    Andrew Oldham

    Andrew Oldham, National Business Manager at Shoebooks

    Hi Lee, firtsly congatulations on making the jump to running your own businesss. On top of what Neil has suggested which are all spot on, my experience of the m... read more
    Hi Lee, firtsly congatulations on making the jump to running your own businesss. On top of what Neil has suggested which are all spot on, my experience of the mess people can get into but not getting some simple advice or assitance with the right accounting software and correct ways to allocate transactions, BAS etc can lead to very expensive $$ mistakes down the track. I recommend you have a chat to a qualified bookkeeper or account to make sure you start off on the right track. Good luck
    Steve Osborne

    Steve Osborne, director at Smarthinking

    Hi Lee, I agree with all of the above. When I first started, the best advice I ever received was to talk to an accountant. Explain what you want to achieve and ... read more
    Hi Lee, I agree with all of the above. When I first started, the best advice I ever received was to talk to an accountant. Explain what you want to achieve and how the business works. Your accountant will then advise on the best way to set yourself up (company, sole trader etc.) and arrange your tax affairs. Accountancy fees for standard services business will be in the region of $1500 per year. Subscription to an online (DIY) bookkeeping system like Xero will be $50/month. On top of that, quarterly fees (say, $150) for a bookkeeper to prepare your return. In my view worth every cent, particularly if, like me, you find bookwork tedious.
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    Tom Radovanic

    Tom Radovanic , Sales Director at SMECASH

    Having a good set of accounts is a must however; what many SME,'S forget is Cash flow projections! This can be done with a simple spreadsheet and should be updated every six months to project the next twelve months. Having a great business model and increasing sales is great but if you run out of cash its game over

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    Wendy Huang

    Wendy Huang , Full Time Blogger and YouTuber at A Custom Blog in 4 Minutes

    There are some really affordable accounting alternatives these days so I would check them out :) Otherwise when you start out make sure you keep all your receipts and transactions so you can give them to an accountant when it gets too much for you or at the end of the financial year :) As others have suggested, something like Xero can help you log your transactions easily and keep them neat.

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    Neil Steggall

    Neil Steggall , Partner at Wardour Capital Partners

    Hi Ling, Accounting can be both daunting and appear unnecessary. It is also best if you can look at it differently as "what records do I need and why" rather than what does the government, ATO or ASIC need. You need accounting records for many reasons but the key ones are:- To help you map and monitor your business so that you can maximise your returns To demonstrate to others (say future investors or partners) the true value of your business To assist in any future finance applications either as a business or as a self employed person To meet statutory requirements.  If computer savvy (I know you are) there are several inexpensive, easy to learn programs available off the shelf or by download - such as MYOB. These really are excellent and come with great guidelines or even guides such as Dummies. They can auto calculate everything you need with just a little set up. There are even more basic guides available free on-line but I would suggest the basic accounting package from a trusted supplier. To help more would involve me writing a book, if you want to talk it through feel free to call me or use my Wardour email or Skype am very happy to chat! Andrew would be well placed to help too!! Cheers & good luck, Neil.

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