Ever wondered why 11 out of 12* startups fail? If your guess is that they didn’t have a solid business case, to begin with, maybe you’re right. But consider this statistic – around 50% of businesses fail in their first 5 years, not the first year. We must be missing something right? While there may be a host of reasons for failure, one common shortcoming is the lack of a robust accounting system that provides early warnings and insights for timely course correction.As a business grows, the key decision-makers are often bogged down by the complexities of multiple financial statements and navigating through them on a monthly and quarterly basis. This hinders day-to-day functions, contributing to sleepless nights and heightened levels of stress. Prudence might suggest venturing into a crash course on accounting but if you’ve been there, you know that’s easier said than done. The smarter and wiser thing to do from a long-term perspective is to enlist the services of a virtual accounting assistant that’ll take over the function and put an end to your accounting woes.Advantages of accounting when done early & correctlyWhile there’s brilliance in even basic financial statements like the balance sheet and profit & loss account, modern accounting allows you to drill down further with detailed reports such as accounts receivable, accounts payable, variance analysis, and so on. These are extremely useful in monitoring cash flows and taking the right decisions, giving you a clear view into which customers owe you money and which vendors are up for payment. Good cash flow is at the heart of a healthy business and a poor one can just as soon sink it.Supply chain management is at the core of most successful ventures and inventory tracking forms the cornerstone for keeping it running smoothly. That’s again something your accountancy service could help you with. Whether you’re looking for efficient completion of due diligence, or a quick analysis of the firm’s future earnings – projections that help you easily arrive at the current market value, accounting is where it usually begins.Companies Act, Goods and Services Tax Act, Income Tax Act and other statutory compliance is another area that is often a black box to business owners. Accountancy services help demystify this, allowing business owners to stay clear of fines and penalties.Last but certainly not least, you need a friend to keep those investors happy and their constant queries answered. Accounting helps in evaluating business performance, giving you a clear snapshot at any point in time.The beauty of number-crunching being just a click awayAccountancy service providers and one-stop portals can offer tools tailored to your business, simplifying financial complexities, and empowering you with real-time data to arrive at informed decisions. What’s more, you can focus on the things that matter like exploring new markets, acquiring new customers, and growing your business, while the experts quietly and efficiently take care of your accounting needs in the background.*Source: Startup Genome – 2019 ReportArtha-Niti Advisors Pvt. Ltd. is a preferred LetsVenture service providing partner that simplifies the real-life financial complexities of startups with its accounting, compliance, and MIS services.Click here for a blog on understanding the business of angel investing!
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