While it’s obvious that any startup needs accurate accounting for long-term growth and business success, few consider how it can impact the overall value of a company. Sure, entrusting your accounting to experts can help your company internally. However, it can also signal to outsiders that your company takes its finances as seriously as the services it provides. Here we break down just a few of the ways that accurate accounting can impact the value of your company.
It goes without saying that accurate accounting is necessary for proper cash flow management. If you know how much money is coming in and going out, you can plan budgets accordingly. Knowing the full financial picture also gives you an idea of how much cash to keep for an emergency. This is necessary to ensure that if unexpected issues arise, your company won’t need to let go of employees or increase its prices just to stay afloat. In turn, this kind of stability signals that your startup is managed well enough to keep the customer experience stable.
Keeping the Team Happy
When you think about it, your financials are intricately tied to employee happiness in the form of wages and salaries, benefits, bonuses, and other perks. With accurate accounting, you know exactly how much you’re spending and can plan for raises, sick leave, benefits and more. This is also important when making hiring decisions and growing your team.
When you have a handle on your company’s finances, you have up-to-date knowledge of what’s in the bank. As a result, any discrepancies that may be the result of fraud are easy to spot to and to deal with accordingly. By nipping any instances of fraud in the bud, you can save your company from a massive PR nightmare and ensure that your customers never lose their trust in you.
Part of accurate accounting means keeping your data safe and secure in the cloud. When data is stored in the cloud and regularly backed up, you never have to worry about losing vital financial information to theft or a natural disaster. With this level of security for your data, customers will have more faith in your company’s ability to keep their information secure.
Better Financial Management
If you’re making financial decisions on the fly, customers are going to question your ability to handle your money. Therefore, accurate accounting is necessary to instill stability and demonstrate that your company is not operating in crisis mode.
Strengthen Customer and Business Relationships
When it comes to customer and business relationships, open communication is key. If your accounting is accurate, you’ll never run into miscommunication over bills that haven’t been paid or orders that haven’t been filled. In turn, stronger customer and business relationships can help to send the message that your business cares about the quality of service it provides.