7 Accounting Basics that Every Company Should Know

Posted by D&V Accounting Services
Jan 15, 2015
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If your company is just starting out, it is only normal that you would want to focus on your operations to make sure that it is going smoothly. When this happens, the day-to-day matters of your company are well taken care of but there are instances wherein the back-end needs of your company are not met. Financial tracking, inventory and proper documentation lapses often occur during this critical moment and, if not mitigated, may end up causing losses for your company. 


During this critical moment, it is important that your back-end needs are given the same priority as your front-end needs, especially when it comes to your finances.  


To ensure your accounting needs are met, here are some of the accounting basics you should know as you start your company and get it off the ground. 


Accounting Basics for Start Up Companies 


Learn more about your Finances 

Working towards the improvement of your critical business numbers means keeping a close eye on your annual profits, your business budget and your working capital. You can work around these better if you understand the mechanics of financial statements, which is a permanent fixture across all accounting requirements. 

Find an Accountant 

Your business needs an accountant— that is a given. You need an accountant to provide you with advice about drafting your business plans, finalising the legal structure of your business and growing your working capital, among many others. Keep in mind that you will also need professional counsel from an accountant in case your business gets audited by the Australian Tax Office (ATO).  

Explore Accounting Software

Modern technology plays a significant role in speeding up the process of your accounting tasks. It also offers a wide array of features to assist you with those accounting requirements. This is why it’s twice as important to pick a reliable accounting software program. You can choose wisely by considering the software’s features, specs, prices and add-ons before giving it a final go. 

Separate your Business Records from your Personal Records

Certain aspects of accounting (such as planning your budget) are easier if you keep your personal accounts separate from your business records. Moreover, complying with your tax liabilities as imposed by the Australian Taxation Office (ATO) is also more convenient if you keep these two distinct. 

Review your Financial Statements

Financial statements are the pillars of your business accounting functions. To keep your business up-to-date with your critical business numbers, preparing financial statements is a necessity. Regularly updating these financial statements is your best defense against an unstable business financial status. 

Approve Budget Plans for Operations

Your budget plan reflects the actual representation of how your business intends to spend its financial resources for a particular period. Determining the approved budget plan for operations allows you to map out the best use of your current business capital without missing out on priority expenses and the chance to increase your profits more. 


Pay your Taxes

Conforming to your tax liabilities is a civil obligation that cuts across the size of your business and the number of employees under your wing. Failing to settle your taxes with the ATO will not just send out a red flag to the tax office, it will also lead to more complex problems such as tax debt and penalties. 


Read Next: 7 Reasons Why Outsourcing Your Tax Preparation Is a Smart Decision 

As you try to manage all the needs of your company, it is important to establish the right foundation and start from the basics. With basic accounting, you can get one step ahead by following these best practices in business accounting. These practical tips will help you track your business performance and assert the economic viability of your business. 


Want to Know how to set up your Company’s Accounting Processes? 

You can grab your copy of our whitepaper Harnessing the Power of Business Analytics to know how good accounting processes can set you up for success.  

You can also schedule a free consultation with us to see how we can help with your finance and accounting needs! 


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This post was first published on 15 January 2015 and edited 01 March 2024. Edited by: Aly Tagamolila    




Our Outsourcing: How to Make it Work guide explores how you can utilize accounting and finance outsourcing to drive growth to your business and add value to your processes.