How can a business startup get finance right from the start?

Starting up a business is an exciting time for you. It’s great for you to showcase your skills and experience in the business world. But unless your background is in management or finance, we know that running your own business can be a steep learning curve.

Never let that stop you from setting up your own business. Our advice on getting your finances right from the beginning can take a lot of stress off your shoulders.

Set up simple financial systems for your business start up

Invoicing and billing system: The kind of system you need depends on the industry that your business start-up belongs to. If you issue invoices to your customers and you don’t have a bookkeeping system, then you need a system. There are invoicing systems that are available online which will generate the invoice for you.

These are our favourites: Invoice2go.comNchsoftware.com, and Billfaster.com. Timely invoicing is critical for cash flow and business survival and growth. And remember that sending regular statements as well as invoices can be just as important for getting those payments in.

Cash flow projections/monitoring: Know where you stand with your bank balance at all times. What is due in, when it’s due, and what you will have to pay out every week/month. Check out this handy cash flow planner from AIB, which could get you started.

What bookkeeping system should I use? This will vary depending on the size and complexity of the business, but at the very least it should be a spreadsheet showing the income and expenditure on a daily/weekly basis. Check out our bookkeeping tips for more help on this. If you really feel you can’t manage, then outsourcing may be a good idea. It may not cost much if your business is small.  Bear in mind that a bookkeeper will probably do the job in less than half the time you would take to do it. Ultimately, your time may be better spent on other tasks.

Invoice requirements

Invoices should include:

  1. Your business startup name and address
  2. Your telephone, email and other contact details
  3. Your VAT registration number, if applicable
  4. The name and address of the company you are invoicing
  5. A unique invoice reference number
  6. The date of the invoice
  7. The list of products or services you are supplying plus a price for each
  8. The VAT amount and percentage for each product/service line
  9. The total net amount of the invoice
  10. The total VAT charged on the invoice
  11. The total amount of the invoice including vat
  12. Payment terms (e.g. 30 days)

It is important to know that you may face penalties if you fail to issue correct invoices – Revenue can fine you for breaches. There are further Revenue invoice requirements if you are a Limited Company.

Keep on top of payments

Don’t let customers get behind on payments. It will lead to poor cash flow problems and could cause you to fall behind with your bills.

Look for 50% up front from new customers and give clear deadlines on all your invoices, e.g. payment due within 30 days. If you have the option for customers to pay by standing orders/direct debits, then encourage this. Some businesses even offer reduced rates because direct debits and standing orders have such a positive effect on cash flow.

Take credit/debit card payments if you are a small business. Try out apps that allow you to take card payments on your phone. Sumup is one you could try, and Stripe is another worth considering.

Follow up overdue payments with weekly statements and phone calls, looking for an agreed date for payments. Alternatively, agree that work will not be completed until payment is made in full.

Consider online accountancy systems

Think about doing your finance and accounts online as it could save you time and money. Using online financial and accounting software packages for small businesses means you can have access to your records at any time, wherever you are. This is incredibly useful if you are on the move a lot.

Using online accounting can also save time for your accountant, which saves money on accounting fees.

Outsource if you can’t do it yourself

If you find that you can’t keep up with bookkeeping, think about outsourcing. Not doing things for your business just because you don’t have time is a serious mistake. If you can’t control your finances, then you are not in control of your start up.

You can use a part-time bookkeeper or outsource to an accounting firm. You should factor in the value of your time. It may be spent more efficiently and effectively on what you do best, which may not be the finances.

Functions which can be outsourced include payroll, bookkeeping, and VAT returns. Check out the accounting services for startups we offer. We also offer a company secretary service to limited companies. Using these kinds of services can keep your business in compliance with all the rules and regulations, which could save you time and money in the long run.

Setting up a business bank account

What is the best business bank account for a small business? Some banks have special startup offers like providing space for you to work and free bank transfers within Europe. Others provide features like free mentoring which could be of benefit to your new business.

Join our free live webinar for startups to access more advice and support about setting up a business in Ireland.

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