Top 9 Accounting Tips for 2023 That We Learned in the Last Year
Written by Amanda Bower | Published: January 10, 2023
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As we begin to round off 2022 and look ahead to 2023, there are many accounting trends that startups and other small businesses can note to level up how they tackle their finances. Different changes in accounting trends are impacting startups in ways that are more important than they might seem. Trends like new digital tools, remote-era practices, and financial outsourcing gained momentum in 2022 and have created new avenues that startups can take to handle their most important financial and accounting matters in better, more efficient, and cost-effective ways.
With that in mind, here are our top nine accounting tips for 2023, based on what we learned last year and where we think accounting trends are heading for the future.
Budget for Taxes
Despite the uncertainty of taxes and how much startups and small business owners might think they’re prepared, taxes are typically a headache for everyone. Research tells us that when small business owners are asked about their main challenges, many cite “taxes” as one.
Why is it that taxes are so standard but still so challenging for startups and small businesses? Because of the nature of taxes, organizations need to budget for them on their own accord. This might not be a big undertaking if a fully-fledged accounting department is in-house or a Chief Financial Officer is on the payroll.
But many small businesses don’t have these in-house accounting experts, meaning that leaders and decision-makers have to navigate budgeting for taxes independently. This can often lead to miscalculations, where insufficient money is put aside for that purpose.
So one of our most important accounting tips for 2023? Learn the ins and outs of tax budgeting from a financial professional so tax season is a breeze instead of a burden.
Outsource Your Accounting
As we discussed above, it’s common that many fast-growing startups and other new businesses don’t have in-house accounting departments. There are many reasons why this might be the case: it might seem like it’s “too early” in the life of the business, there might not be enough resources to hire for the positions, or leaders might feel like they want to try to handle financial aspects of the business on their own.
This is probably the wrong decision. All financial aspects of a business, from payroll to regular accounting needs, are far too important to leave up to chance and require financial expertise to get right. These are big-picture financial issues that have the potential to torpedo a small business if they’re not handled correctly.
Instead of fretting over hiring a full-time accounting team, businesses today can turn to outsourced accounting services. Outsourced accounting firms are the next generation of business accounting services, allowing businesses to receive custom financial expertise as needed. And the best news? It’s typically a fraction of the price of in-house hires (especially costly executive hires, such as a full-time CFO).
Don’t Just Wing It, Strategically Plan
If there’s anything that the past few years taught us, it’s that the business landscape is far from stable, and businesses need to expect the unexpected. Throughout the pandemic, millions of people were put out of work because their employers could not remain open, while hundreds of thousands of small businesses permanently shuttered their doors.
What have we learned from this experience about the financial aspects of a business, and how can we be better prepared going forward? All businesses should be strategic with their finances and not leave things up to chance.
The “just wing it” strategy that might have kept businesses afloat in the past doesn’t stand a chance when a financial crisis strikes. While this applies to every business, it’s arguably more crucial for startups and other fast-growing businesses, which are more vulnerable to fluctuations and financial instability.
Despite the pandemic being behind us, it’s clear that businesses today are still vulnerable to economic challenges. At the time of this post, many business leaders are concerned about an impending full-blown recession while businesses struggle amid inflation concerns and other turmoils in the overall economy. By having a strategic hold on finances and financial strategy, startups can prepare for whatever monetary challenges come their way.
Work With a Team Who Specializes in Your Field
Not all accounting experts are created equal, and one of our top accounting tips is to choose a financial team who specializes in your field. Sure, it might seem like there are a lot of different financial experts to choose from, along with varying types of outsourced accounting providers.
But the truth is that not all of them will be experienced in the nuances of startup accounting services – particularly regarding industry-specific needs. This can be crucial when understanding tax obligations (and where you can take specific tax deductions), financial reporting analysis needs, and strategizing based on your industry and field.
Stay Aware of Potential Recessions
Economic recessions and downturns can greatly impact any business but can be particularly dangerous for startups, which economic factors can more dramatically impact. Recessions can influence how customers spend money and cause overhead costs to rise, putting businesses in a prime position for financial disaster. In order to be best prepared for recessions and downturns, startup leaders can stay well aware of what is going on with the overall economy and look for early-warning signs that things are taking a turn for the worst.
Take Advantage of Remote Accounting Resources
Business accounting today is not like the business accounting of decades past. Today, many next-generation remote accounting resources can help startups and small businesses with essentially every financial aspect of their business.
Remote and virtual accounting resources such as accounting firms and digital programs can make sure experts handle your business’ accounting in the simplest way possible. For example, cloud accounting management gives businesses state-of-the-art tools and world-class financial expertise, regardless of location.
Add Financial Roles as You See Fit
With the rise of outsourced accounting resources, startups no longer need to worry about adding a comprehensive in-house accounting team to their staff from the get-go. This can be a big financial burden for a new business that might also not be necessary for its earliest stages.
But what is necessary is for businesses to still have their accounting needs met by financial experts. That’s where outsourced accounting services come into play. This means businesses can add in-house financial experts to their teams as they see fit when the time is right for them.
Don’t Neglect Executive Financial Expertise
Fast-growing startups often have advanced financial needs, including C-Suite level analysis and guidance, someone to navigate investor relations, and in-depth financial planning. Typically these responsibilities would fall in the hands of a Chief Financial Officer, but for many startups, hiring someone for this position isn’t feasible or beneficial. |
That doesn’t mean you have to go without a CFO because there is another option available to you: virtual CFOs. Virtual CFOs offer support services when needed and can help businesses navigate their most complex financial needs for a much more affordable price than a full-time C-Suite hire.
Understand Your Regular Reporting Obligations
Financial reporting can be tricky, but it’s not to be neglected. There are complex reporting and filing needs that every business must be aware of that can significantly impact a business’s finances.
Leaders might be tempted to tackle financial reporting independently, but this can be very difficult. Leaders should be aware of their financial reporting needs and consult with financial experts to ensure these obligations are met.
Accounting Tips That Go the Distance
This was quite the year for the business landscape and led to many changes in how businesses handle their financial and accounting needs. With 2023 on the horizon, businesses can look forward to advanced digital and remote-first accounting trends that help them best tackle their finances today while preparing for their financial needs of the future.
We learned a lot in 2022 and look forward to helping even more organizations with their accounting in 2023. If you’re interested in best-in-class accounting and financial services for your business using industry-leading practices, we’re here to help. We’re hiline, a next-generation accounting firm specializing in startups and other fast-growing businesses.
Find out how we can help you revolutionize how you handle your business’s accounting needs, and contact us today.
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