Finance is a commodity. Now, before the CPA’s get upset, this is meant in the best sense of the word. A finance professional is one of the only functions that can easily move between sectors. Accounting at a tech company is sufficiently similar to accounting at a retail store, or biotech, or law firm. Understanding the basics of bookkeeping and accounting is important for any entrepreneur, but professional service firms abound, even in rural areas, and accounting is rarely done in-house at a startup.
Accounting involves the recording, analysis, and reporting of financial data. Bookkeeping is a subset of accounting, and is involved solely with recording. For young companies, regular bookkeeping may be sufficient until year-end, when all aspects of accounting are required. As a company grows, accounting becomes more interesting, complex, and valuable. In large and complex businesses, accounting choices can create (or destroy) enormous amounts of value, often with respect to tax strategies. In small companies, an early and then annual conversation with your accountant may suffice. No matter the company size, accurate bookkeeping is an absolute requirement.
From day 1.
Errors in accounting can result in serious cashflow problems as well as legal – even criminal – problems. This is yet another topic that must be done right… but thankfully many skilled professional service providers are available in your area and across the nation (today there is no compelling reason to prefer a local provider over a distal one).
Basics of bookkeeping, and how to qualify, retain, and manage your accountants.