For most new startups, and small and medium-sized business owners, proper accounting often falls to the bottom of their list of priorities. Their focus tends to be on growing their operations, defining products/services, setting prices, and securing and processing payroll.
While this situation might fly for a while, especially at the launching phase, it really cannot drag on without negatively impacting the business.
For your business to survive in a highly competitive market of SMEs, you must have a solid accounting structure as well as a financial advisory that guides you through the intricacies of bookkeeping and the financial analytics required for strategic planning.
Clear and well-organized books become your vault of information about your own organization. They tell your business story in facts and figures. It’s where you can spot inefficiencies, decide on whether to reduce or increase spending, access more resources, and summarize your potential to future or current investors. Moreover, accounting tracks your business transactions for tax purposes and enables it to meet the requirements of the updated Egyptian Tax Authority’s laws and regulations.
Clear, error-free financial records are your best tool when dealing with the Tax Authority. Transactions that are legitimate and supported by proof of occurrence- are eligible for tax relief under the Micro, Small, and Medium-Sized Enterprises (MSMEs) Law.
Assigning your accounting to professional accountants instead of opting for a do-it-yourself model of accounting and bookkeeping is highly advisable to avoid the pitfalls brought about by lack of experience, especially if your small business is growing.
However, regardless of the size or industry of your business, consider setting the following accounting basics, if you haven’t already. Begin with a general ledger of your business’s financials where you record every transaction. Ensure that you have the three main financial statements, Balance Sheet, Profit & Loss Statement, and Cash Flow Statement, that are integral to any business.