Bookkeeping for lean start-ups (Part 1)

The accounting industry thrives on entrepreneurs who are not diligent in filing and bookkeeping. As such, they waste too much money and time keeping their accounts in order rather than working on their product.

In light of this, I’ve written this two-part series to help entrepreneurs adopting the lean start-up methodology to take the right approach to accounting.

Here are four easy things you can do to cut your year-end bookkeeping bill by 30 percent in your first year of business.

1. Open a corporate bank account

Do yourself and your company a favour. If you have not set up a corporate bank account, do so tomorrow. Open the account, and deposit 10 grand. Say goodbye to it — it now belongs to the company.

Draw down only from this account so you can visually track expenditure every month from a single statement. By having a single account means you only need to reconcile a single statement.

To open the bank account you will need the directors of the business to be present with proof of identity. You will also need the company Memorandum and Articles of Association (MAA) and bizfile.

We favor Standard Chartered Bank and HSBC because of their friendly internet banking interface.

(Read: OCBC bank most popular among S’pore start-ups, but it’s probably not the best, High transaction fees and poor customer service from business banks frustrate entrepreneurs)

2. Open physical mail weekly

Collect mail daily but only open it weekly. With a cup of coffee in one hand, sit and open every piece and either throw it out immediately if it’s not relevant, or file it in a plastic concertina folder.

A plastic concertina folder costs $10 and has tabs so you can file according to transaction type. Print out any important receipts from the drop box or email-file them as well. Attach sticky notes instructions.

This exercise takes 15 minutes per week.

3. Pay stakeholders monthly

Set a billing cycle and let your stakeholders (suppliers and staff) know what date they can rely on you to get paid. You will earn the status as a reputable pay master, which will earn you loyalty and favors when you need them.

Be a consistent pay master. If you are consistent, stakeholders will trust you and will stop bothering you with emails and phone calls to get payment. Poor paymasters are deprioritised, while consistent pay masters are prioritised. Simple as that.

Practice this disciple and negotiate better payment terms because you have street cred. When you do get an inquiry, ask them to send questions to your finance email address.

4. Pay yourself monthly

Set aside a day somewhere quiet where you cannot be interrupted. Take the month’s worth of transactions out from your concertina folder, and place them in piles.

Open your cashbook in Excel and key in the month’s revenue and expenses. Open your expenses claim Excel sheet and key in expense claim items.

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That’s it. Do the above steps consistently every month, you can save 30% on your annual cost of bookkeeping. Download template cashbook and personal expense claim forms to help get you started.

Read part two.

Presentation deck at JFDI.Asia talk

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About Futurebooks

Futurebooks is Singapore’s and Hong Kong’s most progressive bookkeeping company. Futurebooks offer affordable incorporation, bookkeeping, business planning and brokering, to entrepreneurs with big ambitions. Whether your goal is to be acquired or to be more profitable this quarter, Futurebooks provide planning to keep your business on track and bookkeeping services that streamline the journey. Using cloud computing solutions like Intuit’s QuickBooks Online, Xero, SaaSu, DropBox, Workflowmax, Vend, salesforce.com and Google Enterprise, Futurebooks are able to offer clients productivity improvements and reductions in the cost of accounting.
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About the author

Anthony Coundouris is the founder of an accounting and analytics firm Futurebooks Pte Ltd. Anthony is obsessed with helping start-up companies incorporate, conduct industry analysis and develop positioning. He has ten years experience in media and marketing, and was founder of Firestarter, a digital marketing agency. Firestarter was acquired by Novus Media in 2010.

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