22 Oct Top 5 Challenges Start-up Businesses Face

Almost all start-ups have great ideas in mind when they started their businesses. They have a vision in mind that they think will work and profit, however, despite the eagerness and spirit, nearly 90 percent of all start-ups fail, not because of bad business idea or bad products or services, but because they usually have poor financial management. In this article, you’ll be able to see the most common accounting challenges start-ups face that you might want to avoid.

1.Organizing and Recording of Receipts

There are different kinds of receipts, there are sales invoices, purchase invoices, expense invoices, and etc., if you don’t have a basic idea about their purposes then you might ruin your financial records. A single mistake in your records might greatly affect your financial decisions.

2. Meeting Government Compliance Deadlines

Doing business in the Philippines also calls for responsibilities to comply with the government. There are specific requirements and deadlines to meet to be able to run your business lawfully. For start-ups, these deadlines usually are easily forgotten due to a handful of business activities thus, causes painful penalties and bad reputation to the business.

3. Income Tax Preparation and Income Tax Return

The rules of Bureau of Internal Revenue (BIR) can be complicated and technical. It requires a lot of research and experience to get to familiarize with it. Many start-ups fail to meet their requirements such as late, non compliance or deficient declaration, hence, the BIR has the authority to audit all internal revenue taxes and impose penalties to anyone liable.  

4. Mismanagement of Funds

For start-ups who manage their businesses on their own, mismanagement of funds is usually one of the problems they deal with. One instance, for example, is the mingling of business funds to personal accounts. This might not sound alarming to you but it does, once your funds are not monitored and managed well, you might wake up one day not knowing where it went or even worse, cause your business to close down.

5. Financial Accounting and Reporting

One important role of an effective business management is the tracking and monitoring of all business transactions. The activities that come with it are recording, summarizing and reporting countless number of transactions resulting from the day-to-day business operations over a period of time.

Start-ups usually fail in this area due to the load of work and limited resources and knowledge on how to come up with the right accounting reports. These reports are used to give you an overview of your business’ financial health and a guide towards your future business decisions.

If you think you encounter these challenges, you’re not alone. Many are experiencing these issues or even failed because, it was too late for them to address the problem. Do you need help yet afraid that it might cost you a ton? Now is the best day for you to talk to us. We can help you with your Bookkeeping and Accounting needs at a very affordable price.

Check out www.bliink.ph to know more about how we could help your business succeed.