Keeping accounts when you've just set up a business

When a business owner has just started up, he or she may be tempted to manage many aspects of company life themselves, in order to minimize expenses. It's common to think thatwhen the company is set up and during its first financial year, its accounting is simple enough to be handled in-house.

On the contrary, some entrepreneurs don't feel up to the task of bookkeeping, preferring to devote themselves to the development of their business and their core activity, sometimes even seeking support from the start-up phase.

So when you set up your own business, there are a number of questions you'll need to answer. Should you manage all or part of it yourself, or entrust it to a chartered accountant? Should you opt for cash or accrual accounting ? Which accounting software should you use? etc.

Explanations.

What accounting requirements must a company meet?

There are certain accounting requirements common to all forms of business, but also specific obligations depending on the legal structure chosen.

All companies must :

• Keep achronological record of entries and withdrawals affecting the company's assets
• Carrying out an annual inventory
• Draw up the company's annual financial statements, including balance sheet, income statement and notes, at the end of each financial year, and file them with the commercial court clerk's office.
• Open a bank account exclusively for the company
• Keep all accounting records and documents for 10 years

Cash or commitment accounting: which should you choose?

Cash accounting involves recording receivables and payables when they are actually received or disbursed.

Accrual accounting records revenues and expenses as invoices are issued and received, regardless of whether they have been paid or not.

It should be noted that cash accounting is reserved for BNC companies and BIC companies benefiting from the simplified real tax regime.

While cash accounting may appear simpler to manage, it offers managers less visibility of the company's financial health, since accrual accounting enables better monitoring of the company's receivables and payables.

The different accounting management options available to business owners

Entrepreneurs have several options for managing their accounting. They can :

• Manage it himself, since no law requires him to call in a chartered accountant
• Manage it partly in-house and entrust the most complicated tasks to a chartered accountant
• Entrusting it to an accounting firm
• Hire an accountant to manage it in-house

Manage your company's accounts yourself 

1. How do I keep my accounts?

If you decide to do your own bookkeeping, you'll need to equip your company with accounting software.

When choosing between all the solutions on the market, you need to ensure that the software complies with current accounting standards, meets your needs and, if applicable, offers functionalities such as the creation of estimates and invoices. You'll then need to set up your accounting software (company information, accounting type, chart of accounts, accounting journals, etc.).

You also need to set up a filing system for your accounting documents.

It's a good idea to keep your accounts on a regular basis, to avoid being overwhelmed by the number of accounting entries you have to record. For each entry, you'll need to enclose the corresponding receipt.

At the end of the financial year, you'll need to close the books, review the accounting records, make inventory entries and draw up the company's annual financial statements.

2. What are the advantages of internal accounting management?

Taking charge of your company's accounting is theleast expensive option. It also gives the entrepreneur a clear picture of the profitability and financial health of his business. However, it does require a sound knowledge of accounting and taxation.

Finally, it's a time-consuming activity that can prevent you from devoting your time to tasks where you can add real value. Managing your accounts can therefore be detrimental to managing your business.

Calling in a chartered accountant

1. The chartered accountant's missions

If you decide to entrust your accounting to a chartered accountant, he or she will take care of all the above tasks. He or she will define the accounting plan best suited to your business, regularly update your accounts, make the mandatory tax declarations anddraw up the company's annual financial statements.

You may decide to entrust only the latter task to him, thus ensuring the conformity and reliability of these documents.

2. What are the advantages of working with a chartered accountant?

As well as relieving you of time-consuming tasks, the chartered accountant's role is to advise the business owner.

He will support you at every stage of your business development. In fact, it's a good idea to consult a chartered accountant as soon as you set up your business, to benefit from his or her expertise, particularly when it comes to choosing the right legal form.

Calling in a chartered accountant can appear to be a source of expense for your company. However, the time saved and the advice provided by a chartered accountant often represent far greater added value for the development of your business than the cost of his or her fees.