Accountancy

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Accountancy is both a science and an art, and you will find that you require greater expertise as the company grows. You can use accountancy and finance to help frame the strategic mindset, research the competition, and learn business models. Keep in mind some tips to consider:

Accountancy is a balancing Act
Accounts Payable
Accounts Receivable
R&D treatment (R is expensive in UK)

When looking to hire an experienced startup accountant look for a small firm, one that is nimble and reasonably priced. You may grant them options/warrants. Later, you will want to hire a good Director of Finance, and eventually a CFO. In even later stages it is advisable to bring aboard Big 8 accounting firm.

1 Statements
2 Ratio Analysis
3 Timeplanning
4 Sources of financial information

Statements

You will need to create cash flow and income statements detailing your revenue (known as turnover in the UK), expenses, and operating income, as well as your earnings before interest, taxes, depreciation and amortization (EBITDA). You will also need a balance sheet based on the formula A = L + OE, where A refers to your productive vs. non-productive assets; L refers to liabilities (short vs. long-term); and OE stands for owner's equity.

Ratio Analysis

Use ratio analysis to better your business. A few common examples include your non operating income(NOI) percentage, your gross operating profit percentage, your marketing and sales percentage, your research and development (R&D) percentage, and the number of sales per employee.

Timeplanning

In the early stages of your business you will want one day per month set aside to accountancy, until your employees number approximately 30, at which point you will want to reserve one day per week. During this time period you will need to determine your monthly profit and loss statement, as well as your cash flow statement, your balance sheet, and bank reconciliation. At this time you will also need to turn your attention to addressing any help with leasing, banks, etc. that you may require.