Financial Management Checklist For Your Software/IT Business

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Financial Management Checklist For Your Software/IT Business

Process Checklist: The key processes you should keep an eye on as a small or medium software development/technology business owner.

1. Record keeping process

How will you maintain a list of transactions within your company? The process around record keeping is critical to ensure you do not miss out on any transactions that need to be recorded for taxation and audit purposes.

2. Budgeting

A detailed plan around where your funds come from and what the expense heads will be is helpful in understanding how much cash is available in the business. A good budget is essential for accurate forecasting.

3. Forecasting

Taking into account what expenses the business will incur and managing your available resources is key to having total clarity on the immediate future.

4. Analytics

Data that can help you understand the growth pattern of your business is important data. Making sure you receive timely reports is imperative when making decisions for your business.

5. Predictive analysis

Based on the reports you receive, you can forecast expenses, revenues, and predict the direction of your business’ growth.

6. Accounting

Deciding on who will carry out certain accounting activities and how or what software should be used is a decision any business owner will need to make during their early stages of growth. For a software business, it is imperative to have a finance team in place from day one since both revenue and expense recording will begin from day one. Software companies will also need to book their earnings accurately to avoid taxation and audit issues later on.

7. Payroll

Forecasting the hiring of key individuals who will drive your business is one thing. However, to ensure each team member receives their salary on time after appropriate deductions is a process in of itself. Putting this in place at the get-go helps you run a smooth and issue-free software company.

Accounting Process Checklist

A software company usually incurs a heavy investment both for human resources as well as IT systems during its initial phase. As much as we would like to reduce the burden of hiring and buying, there is always a basic cost that a company has to bear. And, so it is important to get the accounting process right. Getting the right people on-board to ensure transactional transparency, accurate bookkeeping, strong cash-flow handling, payroll management, and management reporting is very important for the growth of a company. A few points you may want to ensure your accounting system has in place are:

1. Record keeping
2. Revenue identification
3. Month-end close
4. Taxation
5. Audits
6. Payroll
7. Transaction processing
8. Accounts Payables
9. Accounts Receivables
10. Inventory
11. Expense policies
12. Investment policies
13. Asset management