Working on opening a startup is different from changing careers. Its difference with traditional businesses is that startups are technology oriented with high growth potential.
It’s more of a journey that will force you to become better and learn how to manage your finances for you work alone or with a small team to make the business grow. Due to the startup’s nature of scaling at a fast pace, you need to get in control of the cash flow from day one onwards.
The regulatory and compliance framework of the Philippines is complex. As a person who plans on opening a startup, you should be able to learn how to manage your finances to avoid financial red flags, such as tax penalties and SEC violations.
Still determined to get started on your startup journey? Here are financial management tips to help you get in control of your cash flow.
Tax Starts as Early as Incorporation
The best time to incorporate your startup is as early as now to avoid any struggles with equity shares and other legal matters.
But, once your startup is incorporated, taxes start to roll in, whether you have revenue or none. During the 30 days of incorporation, your startup is required to register with the Bureau of Internal Revenue (BIR). If you fail to submit your due diligence to the BIR, get prepared to face financial and criminal penalties. Submitting due diligence is important if you want to avoid short- or long-term trouble.
Include Tax Obligations in Your Business Model
As a tech startup owner, you and your team should already discuss the tax obligations of the business model. Tax obligations differ for each company. The requirements are based on what you’re selling, mainly products and services.
If you’re a merchant, it’s a must to issue the purchase with an invoice or official receipt. On the other hand, those businesses that are intermediaries for another merchant is required to give the customer an acknowledgment receipt on behalf of the merchant and get a commission receipt from the merchant.
Since you’re starting, it’s recommended to discuss your business model with a tax advisor to get insights on how BIR will view your tax obligations. This will definitely help you avoid any trouble regarding taxes in the future.
Look Deeper into Your Future Funding Strategy
You might have your capital structure today, but it’s also important to look at how you will fund the future as well.
Startup owners should plan ahead and see how the startup will perform long term. This will help in identifying what funding strategies will help support your future goals and plans. In addition, getting prepared for the future helps in removing challenges that can hinder your business’ growth.
Invest in Cloud Accounting Software
Investing in cloud accounting software will greatly improve the efficiency of your company’s accounting processes. Tasks that often take up will now be reduced to minutes due to technology, such as booking order processes, recording payments, and delivering official receipts.
All of the data from these and other processes will be then recorded in computerized books, which your accounting team can access any time of the day on any device allowed by the startup to use. It also offers real-time updates, allowing you to see the changes when it happens.
Hire an Expert Accountant
Startups often start with a small team who will handle different roles in the company. Hiring an in-house employee can cost more than doing the job on their own. However, financial matters are better off handled by an expert.
Hiring an accountant offers an advantage to startups — or any type of business — because they’ll handle your financial matters, avoiding penalties from government agencies and legal trouble.
JCSN Accounting Services is an accounting firm in the Philippines that offers startup accounting services for startups in need of bookkeeping, payroll outsourcing, tax filing, and business registration services. The firm has a solid track record of service for the firm houses professionals with over 15 years in the industry.
These accountants are willing to reach out a helping hand in handling your accounting needs. Call +63 2 8247961 or +63 916 5586469 or email firstname.lastname@example.org and focus more on your business as we manage your finances.