Why You should do your own bookkeeping as a Startup S1/E1

An accounting systems, no matter how crude,  is crucial  for all organizations, whether it is a small, medium or large one. It is even more important for a Startup ,  who might not have the resources required to have such a systems.

Therefore, the onus is on the owner or owners to ensure that they keep their own books, taking responsibility for the reporting of the organizations finances,   using Generally Accepted Accounting Principles (or GAAP).

A recent postmortem of 101 startups revealed that showed the 20 reasons why the startups failed

 Among the 20 Reason, "Ran out cash" (29%) and "pricing and cost issues" (18%) are directly related to accounting, and together, these two reasons account for 47% of the reasons for failure.

Reasons such as "No financing or investor interest" (accounting for 8%) , could also be indirectly related to poor accounting, or the total absence of an accounting system.

Cloud accounting softwares have made accounting for small business more affordable and user friendly for non accountants.

In other posts in this blog I will show the readers how they can sigh up for a cloud accounting software, such as Xero, and use the software for basic accounting,  till the organization can afford the services of a full time or a virtual accountant.