5 Accounting Goals Every Small Business Should Meet in Year One

For small and medium-sized businesses, the first year of operation is a crucial period for launching a new business endeavor and hopefully turning a profit. Thanks to modern technology, it has become easier than ever for small businesses and startups to find their footing in the first 365 days. In fact, the Bureau of Labor Statistics (BLS) estimates that 80% of new businesses have a chance of getting ahead by the end of the first year, though not without a comprehensive strategy.

While accounting and bookkeeping seem less glamorous, demonstrating a concrete financial business model is much more beneficial than leaving the numbers to chance. Small businesses are most likely not letting their finances dry up, but there are still some checkpoints owners and entrepreneurs can aim for when spreadsheets are finally designed.

From going paperless to reducing overhead and mastering financial transparency, here are five goals small businesses need to accomplish in the first year:

Simplify expense management

When determining which expenses are necessary for operations, the numbers need to be easy to read and even easier to manage. Small businesses and startups are encouraged to set up an all-in-one solution that gives small business finance leaders a window into what is being spent and who is spending it. Many technologies can even allow leaders to set parameters for individuals and subgroups so that expense reports manage themselves, leaving small businesses more time for other areas of development.

Cut unnecessary expenses

The counts are done and the company didn’t need that recurring subscription or heavy office supply order. In this case, a study of what small businesses thought was necessary versus what was actually needed might be in order. Instead of a cut-and-run strategy, consider optimizing what’s already on hand.

increase deductions

Keeping an eye on spending means more responsibility for deductions that can be used to build businesses later. Small businesses should make the most of start-up costs, legal and professional fees, charitable donations, and interest come tax season to get the most out of future business ventures. Managing all those receipts and keeping up with data entry can really add up over time.

Set aside an emergency fund

Even if business is booming, it’s important to stay proactive in preparing for a rainy day. All industries are at risk of a slow season, so when sales pick up, small businesses need to be prepared to build an emergency fund that can be used when cash is tight. Set a goal for a specific amount of savings every six months that can be archived.

Consider a corporate expense card

Although small business cards exist, corporate cards ensure there is no personal liability for business owners or employees, and employees are not left waiting for reimbursement. Corporate cards also make it easy to report and track spending, and companies can earn rewards directly for distribution at the company’s discretion.

A 2021 survey by TripActions of businesses found that 53% of respondents do NOT have a dedicated T&E expense management solution. Instead, many companies have cobbled together a fintech stack, and many of those tools have not kept up with changes in spending behaviors. Approximately 86% of these respondents work for companies in the US with fewer than 1,000 employees, and 60% had fewer than 100 employees.

Fortunately, with TripActions Liquid™, small businesses can take advantage of an easy-to-implement, all-in-one solution that gives employees, managers, accountants, and financial leaders the tools they need to improve their expense management processes.

The goals are set. Now is the time to let TripActions Liquid help small businesses achieve them.

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