Starting a new business is exciting. It’s also a time when strategy, planning, foresight and conscientiousness are paramount. How you effectively plan and manage your finances is paramount in the first few years of trading.
Receipt OCR scanning technology will positively impact your balance sheet if used correctly
The adage that you must spend money to make money is applicable in this situation. But, start-ups also have a budget – one that can be accurately tracked with receipt OCR – to work to. So, how do you decide what are essential and non-essential expenses, and how can you accurately keep track of all expenses?
For anyone about to embark on a new venture, here’s a short list of the expenses you’ll need to consider – and some overrated ones that you can probably do without.
Essential Expenses – IT Infrastructure and Online Presence
The world is online. Think about it, when was the last time that you needed to find and product or service and didn’t Google it first? A successful start-up should have a website.
Do you need to have an aesthetically eye-catching, fully optimised website that draws customers attention from the second they visit from your first day of trading? Not necessarily – though it certainly couldn’t help. What you do need is an online presence that let’s people know who you are and how you can help them. You can build the website as your business expands in the coming months.
It’s worth remembering that website hosting fees are typically miscellaneous expenses. This means that they can be reimbursed. All you need is a smart phone and with receipt OCR scanning app to accurately record and save the cost.
You should also make sure that your website has a good broadband connection speed – ideally around 17Mps. This will prevent any buffering or stuttering. A website that fails to load or has delayed navigation can result in visitors losing interest. Time is money.
Essential Expenses – Accountancy and Bookkeeping
How you manage your time is essential to the success of any start-up. Your time needs to be focused on building client relationships and providing service value.
As essential as invoicing and chasing outstanding balances are, spending too much time on these activities means that you’re neglecting more important areas of your new venture.
Using online accountancy platforms like Quickbooks will help streamline your processes. Accountants and bookkeepers can use the software – creating automated invoices and chasing payments.
Receipt scanning API can also help you to streamline and manage your expenses effectively. This is especially important should you have a budget to work to as you’ll never need to worry about losing another receipt.
Non-Essential Expenses – Office Space
One expense that a start-up can certainly do without is office space. Finding office space that’s within a start-ups budget is highly unlikely. With rent and potential common area maintenance (CAM) fees, insurance and utility costs, you’ll quickly find costs will escalate to.
A better solution is to work from home. You can claim on any utility and phone costs – all you need to do is keep hold of any receipts and then use receipt OCR to record and be reimbursed for your expenses.
None-Essential Expenses – Employees
It’s true that for your business to thrive, it’s important to surround yourself with people who have skills that you do not. However, wages can be a millstone round the neck of any start-up business. Most start-ups cannot afford to shoulder the financial responsibility of employees when first starting out.
If you absolutely need to use the skills of experienced people, consider outsourcing to freelancers or hire team members on a part-time basis. This will allow you to control costs effectively and prevent inflated overheads.
These are just four short tips for start-ups. Making the right decisions when you start a business will help you to lay the foundations for success in the years to come. An app with receipt scanning API could well prove a vital tool in your first months and years of trading – allowing you to control expenses and manage your finances effectively.