As COE (chief officer of everything) you are also the CFO. We're not talking about budgets today, instead, where did the money go? Here are some things I have learned:
1) Set up a business bank account for company money transactions only.
2) Only 1 person has checks. You never know when your co-founder may decide to write himself a check to cover a credit card bill (actually happened to me).
3) No debit cards. Ever. You need a paper (or electronic paper trail).
4) Get bill pay service (should be free) to automatically write and record checks.
5) Download and use a simple expense report form that everyone uses.
6) Before any check is processed there must be a corresponding invoice or expense report form.
7) Use dropbox and create a banking folder. All statements, bills, etc. go in here. Now you have a backup of these transactions and if you want to use an accountant, you can share it with them.
I also like to use a separate credit card which has good tracking when I travel or buy anything. That way you always have an electronic receipt. I prefer American Express. One of the better deals is getting a Costco True Earnings American Express Business card. It's free with your Costco membership. As long as you only use this for business activities, finding receipts to support those expense reports is quite easy.
Part 2: If you're Venture backed you need to submit financial reports to your investors on a periodic basis. I tried something a little different this year and it seems to be working. First off, buy the latest Quickbooks. For our purposes, doesn't matter which level. Next, make sure you have a good spreadsheet for your capital showing who paid what, when, for the number of shares of stock.
Instead of doing it yourself and messing it up, or hiring a bookkeeper to mess it up, I'm doing it myself with a black belt in Quickbooks looking over my shoulder. Since they work remotely, this works well. We spent an hour setting it up. And if I need a little help each month, he charges a very reasonable rate in 15 minute increments. In the beginning, doing it yourself, and spending $15 - $30 / month for a coach makes a lot of sense.
When you need to do your taxes or hire a full blown accountant, everything will be in perfect order.
Comments