Are you an e-commerce business owner who is looking for a bookkeeping or accounting solution? If so, you may be wondering if there is a specific accounting system for e-commerce companies.
The short answer is that there is no one-size-fits-all answer to this question. Depending on the size and complexity of your business, you may need a different bookkeeping or accounting solution than another e-commerce business owner.
However, there are some bookkeeping and accounting tips that can help make the process simpler and more efficient for e-commerce businesses. In this blog post, we will share some of our top bookkeeping and accounting tips for e-commerce businesses and answer some of the important questions that you have in mind.
What is e-commerce accounting?
Ecommerce accounting is the process of keeping track of and analyzing financial data from e-commerce transactions and assets. The data collected throughout these processes are critical building blocks for future business decisions.
There are a few different types of data that e-commerce accounting can cover, but the most important ones are financial transactions and customer data. Financial transactions include things like sales, refunds, taxes, and fees. Customer data includes things like customer names, addresses, contact information, and purchase history.
By preparing and analyzing monthly financial statements, accountants help businesses run smoothly on a day-to-day basis. The regular updates allow managers to make decisions with the most current information available, while also providing annual oversight of payroll and tax payments.
Do I need an accountant for my e-commerce business?
Taking your company online to an e-commerce platform is an excellent way to grow. To avoid any snags along the road, work with an accountant that understands e-commerce sales and international tax issues.
If you’re unsure if you need an accountant, the answer is probably yes. Owners who are less financially savvy are going to want someone experienced in this area to guide them, no matter what the accountant’s credentials may be.
While you can find many qualified accountants, it’s best to select one with experience in e-commerce. They’ll know the ins and outs of common issues that may come up, such as sales tax and international transactions.
What are the benefits of using an accountant for my e-commerce business?
There are several benefits of using an accountant for your e-commerce business, including:
– Help you save time and money by keeping track of your finances and ensuring that all financial deadlines are met.
– Provide valuable insights into your company’s financial health and performance.
– Help you make informed decisions about your business by providing advice on financial planning and strategy.
– Help you reduce your risk of financial fraud and identity theft by keeping your financial information safe and secure.
How do you manage e-commerce in accounting?
E-commerce managing is the process of handling and organizing the finances for your online store. This can include keeping track of inventory, sales, expenses, refunds, and taxes.
There are a few different ways to manage e-commerce in accounting, but there are core principles that you should keep in mind, no matter what method you choose.
– Determine the difference between returns and chargebacks.
– Record information accurately.
More in detail :
1. Categorize Every Transaction
The first step in accounting for eCommerce is categorizing each transaction. You need to know what kind of product each transaction is for and how it fits into your inventory. This will help you better understand your business finances and make more informed decisions about where to allocate your resources.
2. Keep a Business Budget
A budget is an essential tool for any business, but it’s especially important for eCommerce businesses. With a budget, you can track your income and expenses so that you always know where your business stands financially. This will help you make informed decisions about how to grow your business and avoid financial problems down the road.
3. Stay Current with Taxes
Taxes are a complex and ever-changing business area, so it’s important to stay up-to-date on the latest tax laws. This is especially true for eCommerce businesses, which may be subject to different taxes than traditional businesses. A qualified accountant can help you navigate the tax laws and ensure that you’re paying the correct amount of tax.
4. Determine the Difference Between Returns and Chargebacks
Returns and chargebacks are two types of transactions that can occur in eCommerce. It’s important to understand the difference between the two so that you can properly account for them. Returns are when a customer returns a product they purchased, while chargebacks are when a customer disputes a charge on their credit card.
5. Record Information Accurately
Accurate record-keeping is essential for any business, but it’s especially important for eCommerce businesses. This is because eCommerce businesses deal with a lot of data, including customer information, order details, and financial transactions. If this data is not accurately recorded, it can lead to financial problems down the road.
How do you record e-commerce sales?
If you want to record a sales invoice for sales made through an e-commerce platform, you will need to create or update a ledger for the e-commerce operator. The ledger will need to include the name of the e-commerce platform, the date of the sale, and the amount invoiced.
You can then create a sales invoice in your accounting software by including the information from the ledger. Be sure to include the e-commerce operator’s name, the date of the sale, and the amount.
When you record the sale in your accounting software, you will also need to include the name and contact information of the customer. This will help you keep track of your customers and ensure that you are able to reach them if there are any problems with their orders.
What are the best accounting practices to use for an online business?
To optimize your online store’s accounting:
– Connect it to powerful accounting software
– Check reconciliations regularly
– Stay on top of inventory and COGs (Cost of Goods Sold)
— Updated refund &chargeback procedures & track other expenses carefully.
Go with a cloud-based accounting solution for the ultimate in convenience & accessibility.
These practices will help you keep a closer eye on your business’s finances and ensure that you are making informed decisions about where to allocate your resources.
Why, you ask? So you can:
– Automatically update your records
– Send invoices & collect payments online
– View reports from anywhere, anytime
How does eCommerce affect accounting?
E-commerce technology likewise allows businesses to monitor customers’ selections by keeping track of their clicking habits. This data and technology can assist accountants in giving useful information that helps determine the true cost of items. Advertising expenditures may be directly linked with the goods sold. Complex, data-driven, and global. These are only a few words that describe how e-commerce affected accounting.
Technology has drastically changed the way we do business, and e-commerce is one of the most significant game-changers. Here are a few ways that eCommerce has affected accounting:
1. Increased complexity
The biggest change that eCommerce has brought to accounting is increased complexity. With businesses now operating on a global scale, there are more transactions and data to keep track of than ever before. This has made it essential for accountants to be able to use technology to its full potential in order to keep up with the demands of eCommerce.
2. Data-driven decision making
Another change that eCommerce has brought to accounting is the need for data-driven decision-making. With so much data available, it’s essential for accountants to be able to analyze this data and use it to make informed decisions about the business. This requires a different set of skills than traditional accounting, but it’s essential for businesses to be able to compete in the eCommerce world.
3. Greater need for transparency
Lastly, eCommerce has also brought a greater need for transparency when it comes to accounting. With businesses now operating on a global scale, there is a greater need for accountants to be able to show where the money is coming from and where it’s going. This transparency is essential for businesses to build trust with their customers and investors.
– FreeAgent is the second most popular accounting software for e-commerce businesses.
– Xero is another great option for online retailers.
– Wave Accounting is a good choice for e-commerce businesses on a tight budget.
Use accounting software to automate bookkeeping tasks, track inventory levels, manage sales tax and invoicing, and stay on top of your business finances. For more options and tips, read our article.
How can a poor accounting method affect the business?
Bookkeeping is vital to any business as it provides insight into past spending and areas of improvement. Without proper bookkeeping, you may end up paying your debts late, leading to more interest rates, loss of credit, etc. Having a good accounting method helps business owners avoid these costly bookkeeping mistakes. Poor accounting can also result in the loss of customers, as they do not have faith in the company’s ability to manage their finances. Furthermore, it can also lead to legal trouble if the business is not adhering to the proper accounting standards. Therefore, it is essential to have a good accounting method in place to avoid any negative consequences for the business.
What are some common bookkeeping mistakes?
Not;
– Keeping track of receipts and invoices.
– Separating personal and business expenses.
– Reconciling accounts on a regular basis.
– Tracking inventory levels accurately.
– Using accounting software or keeping digital records.
For more information on bookkeeping mistakes and how to avoid them, check out our article.
Overall,
E-Commerce has had a big impact on accounting, causing increased complexity, the need for data-driven decision-making, and greater transparency. These changes have made it essential for accountants to be more tech-savvy than ever before. To stay on top of their game, accountants should use accounting software to automate bookkeeping tasks, track inventory levels, manage sales tax and invoicing, and stay on top of their business finances. Additionally, they should avoid common bookkeeping mistakes such as failing to track receipts and invoices or not separating personal and business expenses. By taking these steps, accountants can ensure that they are providing the best possible service to their e-commerce clients.
Accounting and bookkeeping for an e-commerce company may appear to be complicated, but they don’t have to be. By following some best practices and keeping on top of your finances, you can ensure that your business runs smoothly and avoid any costly mistakes. If you don’t know where to start or if you want to build on what you already have we can help. Our bookkeeping and accounting services are designed to meet the unique needs of e-commerce businesses. We have many great articles that can help you get started. If you have any questions, feel free to reach out to us. We hope to have answered some critical questions and offer valuable insight into what you need to know about bookkeeping for your e-commerce business!
Many businesses don’t realize it, but their accounting method can have a major impact on their bottom line. In fact, poor accounting is one of the leading causes of business failure. Making a mistake in your accounting methods can have disastrous consequences for your business. Here’s what you need to know to avoid this critical error.
How Poor Accounting Can Hurt Your Business
There are a number of ways that poor accounting can hurt your business. Perhaps the most obvious way is that it can lead to inaccurate financial statements. This, in turn, can make it difficult to make sound decisions about where to invest your resources or how to price your products and services. Additionally, if your financial statements are inaccurate, they can put you at risk of violating tax laws or running afoul of government regulations.
Another way that poor accounting can hurt your business is by causing you to miss opportunities to claim valuable deductions or take advantage of other tax breaks. For example, if you’re not tracking your inventory properly. You may be paying too much in taxes on the products you sell. Similarly, if you’re not keeping careful records of your expenses. You may be missing out on deductions that could save you thousands of dollars come tax time.
Finally, poor accounting can also lead to cash flow problems. If you’re not keeping track of your receivables and payables. It’s easy to fall behind on payments and rack up late fees and interest charges. This can quickly eat into your profits and put a strain on your relationship with vendors and suppliers.
According to data gathered by U.S. Bank and presented on the SCORE/Counselors of America’s Small Business, cash flow difficulties are the reason that small businesses fail. This includes a lack of experience with accounting and money, as well as a weak business plan. Other problems include starting with too little money and not having a firm plan. A certified accountant is essential from the very beginning stages of your business all the way to its conclusion.
Role of an accountant in E-commerce
Accountants are uniquely positioned to determine where and to whom online intranet information items (such as data on costs, revenues, production, budgets, standards, variances, and quality) should flow.
This is accounting’s “traditional” role in an organization. Accountants maintain and analyze financial data to provide insights that inform operational and strategic decision-making throughout the organization.
Thus, accounting has a new role in e-commerce: accounting is no longer limited to providing financial information to management; accounting must also provide operational and strategic information to all decision-makers in the organization.
The role of accounting in e-commerce is further complicated by the fact that accounting data often reside on the Intranet, where they can be accessed not just by accounting personnel, but by anyone with a PC and an Internet connection.
Thus, accounting must now concern itself not just with the accuracy of its data, but also with its security and integrity.
Do I need an accountant for my e-commerce business?
After reading these you might be wondering, Do I need an accountant for my e-commerce business? The answer is: it depends. If you have a relatively simple business with straightforward accounting needs, you may be able to get by without one. However, if your business is growing and becoming more complex, it’s probably time to bring in some help. An experienced accountant can save you time and money by keeping your books in order and helping you take advantage of every tax deduction and credit to which you’re entitled.
As you can see, poor accounting can have a devastating effect on your business. Thankfully, there are steps you can take to avoid making this mistake. Be sure to work with a qualified accountant or bookkeeper who understands both the mechanics of accounting and the specific needs of your industry. Additionally, make sure you establish clear policies and procedures for maintaining accurate financial records.
By taking these precautions, you can minimize the risks associated with poor accounting and help ensure the long-term success of your business.
At our accounting firm, we offer a comprehensive suite of services specifically designed to meet the needs of e-commerce businesses. We can help with everything from bookkeeping and tax preparation to financial planning and analysis. Contact us today to learn more about how we can help your business thrive.
What services do human resouorces hr consultants provide
You may not have the time or money as a new small business owner to hire an in-house human resource person or department. That’s where human resource consultants come in and can provide you with the extra help you need. But what services do human resources (HR) consultants provide? Outsourcing by using a consultant instead of hiring in-house saves you time and money and potentially even saves you money on benefits premiums (e.g., employee retirement plans). This is because they are connected and they come with a plethora of experience.
“HR consulting is the practice of delivering all aspects of human resource management as an external provider” (SHRM, 2022). Human resources is extremely important in protecting your business against employee lawsuits and claims, like wrongful termination, harassment, retaliation, and discrimination. Additionally, HR helps you with compensation and benefits, recruitment/retention, hiring/firing, and keeping up to date with any laws that may affect the company and its employees.
Many small businesses wait until they are sued or need to fire someone to consult with an HR professional. This could be too late. If you haven’t hired an HR consultant yet, you should do so right away. A new business needs a professional HR consultant to develop the best strategies and policies for hiring and retaining talent. It’s also best practice to have policies and procedures, an employee handbook, payroll, compensation and benefits early on – to make communication and expectations very clear to employees. Even employee training and development is important early on to keep you competitive as an employer and to keep employees engaged. HR consultants can take care of all of these things – and more!
This blog will discuss the standard HR consulting’ services you can expect and what Startup Tandem does above and beyond.
Standard HR Consulting Services:
Developing, revising, and implementing HR policies and procedures.
Analyzing a company’s current HR programs and recommending solutions.
Writing or revising your company’s employee handbook.
Payroll processing.
Employee benefits administration.
Professional Recruiting Services.
HR Audit and Operational Review.
Compensation /benefits Strategy and Planning.
Employee Training Programs.
HR Strategy.
Succession Planning.
Leadership Development & Coaching.
Startup Tandem’s Human Resource Consultants Twist:
We heard your questions, so we will walk you through HR consultants’ services and what Startup Tandem does differently.
Recruiting – Once you are ready to hire internally, we will write clear descriptions and find, screen & hire talent for you. If you prefer coaching, we can guide you in completing these crucial steps yourself by creating a process specific to your company’s product, stage, needs and current employees.
Compliance – We will help you with payroll, HR policies, and systems, including employee handbooks, policies and procedures (P&Ps), and finding the best human resources information system (HRIS). We keep you up to date on federal and state equal employment and non-discrimination laws, anti-harassment laws, and workers’ compensation laws. See our recent blog on how to write an employee handbook here.
Retention– Once your talent is on board, we will train them, grow them professionally, and succession plan when you know that key employees are moving on. We uncover what your employees’ motivations are and build on their specific needs, wants and appreciation at work languages.
Startup Tandem will help you with all the hard stuff, too
Layoffs/terminations – We provide strategies, conversation counseling, and guidance for your business. This will help you to support transitional employees and avoid wrongful termination. For an additional fee, we will terminate your employees for you, ensuring all legalities and taking out the emotion.
The Hard Stuff – We will ensure your contracts are valid and up-to-date and your HR investigations are unbiased. For an additional fee, we will conduct your investigations or write your contracts for you.
Onboarding– We provide checklists, mentorship programs, and other best practices tailored to your organization, from the new hire’s first engagement to the end of their introductory (probationary) period.
Culture & Leadership – We will help you build a culture where employees feel happy to work, using evidence-based culture and leadership programs specifically customized for your organization. The process starts with conflict, personality, strengths, and appreciation assessments that help individuals and groups discover themselves and work better together.
Compensation – We look at your budget and business strategy to analyze and advise on pay increases and recommend staying competitive with talent yet staying within your means. Additionally, we work with our CFO, financial advisory department, tax department, and financial analysis department to fit your employees and their compensation into your unique financial puzzle.
Benefits – We have licensed insurance agents that can write life & health insurance and retirement plan policies. We also consult on mandatory benefits and recommend discretionary benefits that keep employees thriving at work (according to the literature on job satisfaction and retention).
How Can Startup Tandem Human Resource Consultants Help?
Aside from tapping into any of the outsourced HR services mentioned above, we want you to know that Startup Tandem provides full-cycle services to startups with you from beginning to end.
Startup Tandem believes in using unique pricing structures that enable startups to receive valuable services for a fixed price (rather than billable hours).
Want to know more about what our human resource consultants provide? Get in touch now.
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References
SHRM. (2022, April 26). Introduction to Consulting. SHRM. Retrieved September 12, 2022, from https://www.shrm.org/ResourcesAndTools/tools-and-samples/toolkits/Pages/default.aspx
There are different types of debt financing for businesses. Financing for small businesses can become a challenging process as many startups lack cash flow, credit history, or don’t have assets. Luckily there are lenders out there that can help startups bridge the gap to meet customer purchase orders or pay their employees. In this blog, we will discuss the different types of debt financing.
Cash Flow-Based Loans
Cash Flow Based Loans allow businesses to receive financing based on the historical cash flow and the projected future cash flow analysis. So, companies use generated cash flow to pay their loan. Cash flow-based loans suit companies with positive margins that generate high month-over-month sales but do not have assets to use as collateral. For example, this type of loan is suitable for service companies.
One of the cash-flow-based financings is Merchant Cash Advances. This loan suits businesses that could not qualify for other business loans. The payback is bounded to the revenues, which secure the company when it suffers from low incomes. However, the disadvantage of this loan is that sometimes APR for this loan can reach even 100%, which makes it one of the most expensive loan types.
SBA is another type of loan for small businesses that may meet specific qualifications like solid financials and good credit history. Certain SBA loans are best suited for companies that have been doing business for a few years. SBA loan amounts can reach up to $5 million and usually have an APR from 7% to 25%.
Asset-based lending is a prevalent way of receiving financing for startups at an early stage. An early-stage startup cannot provide sufficient cash flow or assets to approve the loan. In this case, the company can use land, building, equipment, accounts receivable, customer purchase orders, inventory, or other assets for financing.
The main difference between asset-based and cash-flow-based loans is that the risk for the lender is high due to the little liquidity of the assets. The loan is riskier than others; therefore, the amount to be received will be less than what the assets are worth. The interest rate still depends on the asset and the asset’s generating cash flow. Also, other variables, such as credit history and business operation period, affect the interest rate. The most common asset-based borrowers are early-stage startups to more mature small businesses with physical assets to use as collateral with poor cash flow.
One of the options for this form of loan is Equipment financing. Business owners receive enough money to purchase the equipment and pay the loan at a 4% to 40% interest rate. It typically does not require a high credit score.
Another popular asset-based loan type is Invoice Financing. Businesses use it to cover payroll, rent, and other operating expenses. For the lender, the unpaid invoices act as collateral for the advance. It can cover up to 100% of the invoice value charging around a 3% processing fee.
Some lenders will be able to finance against a percentage of customer purchase orders and a percentage of open accounts receivable. The formula to calculate this availability includes many factors: how fast you can collect the accounts receivable and the number of open POs.
Types of loans that are offered to small businesses.
Different types of startup loans vary by industry, loan purpose, and loan structure. Let’s explore some of the financing options that are the most suitable for startups and that we have worked with before:
PayPal Working Capital is a loan with a flexible payment system bound to sales settled with PayPal. It is a good finance option for e-commerce businesses.
PayPal Working Capital charges one affordable fixed fee and the payout is deducted as a percentage of PayPal sales. For example, the business can select the payment of 30% from the sales. This is a form of finance against your cash flow or revenue stream mentioned above.
Shopify Capital is another financing offered for e-commerce companies. It works similarly to PayPal financing. The remittance rate is charged daily as a percentage of the daily sales until the loan amount is remitted. Total owed amounts consist of two numbers: fixed borrowing cost (the fee) and the loan amount. The loan term has 60 days.
Other types of loans
Flexport capital allows access to cash to cover supply chain or inventory purchase costs. This loan has extended payment terms for up to 120 days and can advance up to 80% of commercial invoices. You can use 100% of the loan pay for customs duties. Flexport Capital pays suppliers directly with no additional fees to the borrower.
Clearco offers to fund marketing and inventory spending for e-commerce businesses. Loans varies from $10,000 up to $20 million. Clearco offers revenue-based financing, and the payments are made when the business generates sales.
Circle-up is a lending option that provides flexible capital for CPG businesses. Companies can use them to purchase inventory or increase marketing dollars. Circle Up offers both cash-flow-based loans and asset-based loans. They use open customer purchase orders and/or accounts receivable to determine the availability of funding. This type of loan is an asset based.
The main criteria while choosing the loans typically are:
The purpose of borrowing money.
Qualifications for the loan.
Financing form.
Payment terms.
Annual Percentage Rate (APR).
APR gives the actual costs bound to the loan, which considers fees and payments. There are many loan payment calculators that businesses can use to estimate loan APR, but the general calculating formula for APR is:
APR = ((Fees+Interest/ Principal/ N) x 365 ) x 100
Where interest is the total interest paid over the loan life, the principal is the loan amount, and N is the number of days in the loan term.
Startup Tandem CFO helps startup owners understand their working capital needs and creates an analysis of possible solutions to choose the best suitable option. We will look at your current cash burn, develop a plan to help you meet your customer demands, scale the business or even pay your employees. We work with many debt lenders that can help you obtain necessary cash for your business plans. contact us to know more or make an appointment to see us at our Los Angeles CFO location.
Business valuation is essential when a company wants to sell a portion or all of the business, merge with another company, or acquire another. It is a process of determining all aspects of the business, from its current worth to projected growth, revenue, debt, and other crucial areas, by applying objective measures. Usually, an investor or a potential buyer evaluates the company’s value by looking at its business valuation outcome.
Why is it important?
A proper valuation is crucial to ensure the company is headed in the right direction. It can also help mitigate the risk of underselling a business. It gives a detailed overview of the business’s health and sustainability in the long run. Choosing the suitable valuation method is vital as each entity has a unique business model, which will help precisely interpret the business value.
The valuation methods
A valuation usually includes the company’s capital structure and a thorough analysis of the management. Future earnings prospects and the current value of its assets are of course also of interest. The method used in valuation could vary among analysts, evaluators, industries, and even the size of a company. The primary or common approach is to firstly review the financial statements. This is often done by using the discounted cash flow method, or making a similar business comparison. Below are six standard forms of business valuation which widely used across industries:
Market Capitalization: This method is the most straightforward and fastest. It derives by multiplying the company’s per-share price by the outstanding number of shares. The result will show the current market cap size of the company. Most of the time, this number is compared with previous years to analyze how much the company has grown in its value. It might give a rough projection of future growth potential.
Times Revenue: Under times revenue, a series of revenue that you generate over a certain period is applied to the associated industry multiplier. This will also depend on the current economic situation. The industry multiplier plays a significant role in determining the value of the business within the same industry.
Earnings Multiplier: This method will create better value for a company than the time’s revenue model. It is because the profits your company earns are more reliable as it is based on the financial success of the company. A company that decides to acquire another entity usually prefers to use this method because it closely reflects the financial soundness of the business.
Other commonly used valuation methods
Discounted Cash Flows: DCF use projected cash flows in the future, which you need to adjust to calculate the company’s present value. The current inflation rate is an important factor when using this valuation option. Usually, a company presently low on cash flows but expecting more business activities in the future might benefit from this method.
Book Value This is one of the quickest techniques to evaluate a company. It is done by simply subtracting the total liabilities from the total assets. You can find these numbers on the balance sheet of a company.
Liquidation Value This means how much a company is worth if it liquidates its business and pays off its current liabilities. Getting a positive net asset value is favorable, especially if the company wishes to sell the business in its entirety.
How could a startup company benefit from having one in place? And what is the best valuation method?
A startup entity is almost always low in cash flows and probably has little to no revenue during the initial stage of the business. So, if a startup wishes to sell its business or participate in M&A, it has to show a reasonable business valuation to attract investors and partnerships. Out of the six methods above, I think the best way to evaluate the company is by using DCF. This model creates fictitious future cash flow values based on the business projection, which is done using the basis of current plans and patterns of operations. A comparison with a similar company will give a better picture of the company’s growth and sustainability in the future. Analyzing the expected future cash flows will provide a clearer picture of the company’s present value.
Having a valuation in place will also help the business owner navigate the business better while considering the factors leading to its value
How can a startup increase its valuation?
When you create a valuation by using any of the methods best suits the nature of the business, it is more likely to effectively address the areas of a financial statement that need to boost. Identifying these elements will hugely impact the business processes. It can also enable the company to run efficiently for better valuation in the future. Some of the common ways a company could increase its value are as follows:
To have a thorough and defensive growth plan: A business especially in the early stage will benefit from creating a vigorous and defensive growth plan for the next couple of years or more. You can do this by stating monthly projected growth and support with facts and figures. Usually, this information will pique investors’ interest and help the business move in the desired direction.
Build a robust management team: For the sustainability of a company. A new entity must form a strong management team who can drive the company’s profitability and activities while holding on to the principal foundations of the company. This will add value and create a positive perception of the outlook of the overall management
Other important aspects of a valuation
Lead sources and revenue diversification A company should diversify its revenue and business lead sources to stay competitive. It should also create barriers for competitors to take over the market. You can do this by having multiple market segments targeted. The business lead resources rather than heavily relying on a single avenue. Product and service diversification could open doors to a broader network of trade.
Create patents on intellectual properties This is common for a company with unique and distinctive products or services. Patenting the brand, image, or technology will reward the company in the long run and automatically increase its valuation. Investing in the upkeep and advancement of these intellectual properties will benefit the company and enable it to grow with the market progression. For example, Apple’s technology is unique and stands distinctive amongst its competitors, thus making them strong and nearly impossible to copy due to its patented properties.
To better understand the value of a business, choosing a suitable valuation model is essential. A company can have one in place to reference and compare with previous performance. The underlying information should be precise and thorough to achieve the best result, especially from the financial statement. Potential investors will first want to know the company’s worth and projected growth before deciding on investing or acquiring it. Besides that, it also helps when filing business taxes, as the IRS requires a company to show its current fair-to-market value.
Here at Startup Tandem Advisory, we will be able to assist you in advising and choosing the right way to perform a valuation. Firstly, we will study the industry and create appropriate benchmarks to compare a company with its competitors. Our advisory process includes research, analysis, and recommendations for what needs to be done and how. Secondly, we will be able to identify the areas to improve the financial statement. We will gather enough information to execute a business valuation accordingly. If you want to, we will provide ongoing advisory services on growing and sustaining the current business operation. This can help create higher sustainability, especially during market uncertainty like we are experiencing now. If you are remote contact us for a free consultation, if you are in California, contact us to make an appointment to one of our LA locations!
