Clean bookkeeping is essential for any business, but it is especially important for technology and biotech firms that receive funding from investors and grants. These firms have unique accounting needs that require specialized attention. Scientists, physicians, software engineers and professors who found these firms are often experts in their respective fields but may not have the same level of expertise when it comes to accounting.
When dealing with government grants from organizations such as the National Institute of Health (NIH), Department of Energy, Department of Defense or from your state, it is crucial to have specific grant accounting that tracks all expenses correctly. Then you will be able to easily report to the grant provider and receive appropriate draws. Be sure to watch our BudgetEASE Broadcast on YouTube, “Grant Accounting for Biotech Firms”.
BudgetEASE specializes in grant accounting. We set up our customers for each grant or sub-customer and put together a budget by customer in QuickBooks. This allows them to keep track of how much they’ve drawn down and how much more they have to spend for that grant, even when dealing with multiple grants.
In addition to grant accounting, technology and biotech firms also have other accounting needs that require specialized attention. For example, they may need to account for research and development expenses, stock options, and equity compensation. Proper bookkeeping ensures that these expenses are accounted for accurately and that the company follows all relevant regulations.
Here are some important things to do to successfully manage your tech firm:
- Keep accurate records: Keeping accurate records of all financial transactions, including expenses, revenue, and investments, is essential for any business.
- Implement industry standard grant tracking systems. Grants are best as customers. You can run P&Ls by customers to see if you are on track in using your grants.
- Separate business and personal expenses: Mixing personal and business is not a good idea for any business. It’s crucial to keep these expenses separate when you have investor or grant funding.
- Reconcile accounts regularly: Reconciling accounts regularly can help identify discrepancies and ensure that your records are accurate.
- Track expenses by project: Tracking expenses by project can help ensure that each project is on track.
- Create a budget: A budget is essential for any business, and tech firms are no exception. Without a budget, it is difficult to track expenses and revenue accurately. The budget lets you know if advance when you need the next round of financing or to apply for your next grant.
- Understand tax laws: Tax laws can be complex, and it is essential to understand them to avoid costly mistakes.
- Forecast cash needs: Having a system in place for managing your finances can help prevent errors and confusion.
When it comes to accounting software, there are several options available for tech firms. We rely on QuickBooks because of ease of use and communication. QuickBooks is a popular accounting software solution for small and midsize businesses. It offers an impressive array of features, including bank reconciliation, income tracking, and expense tracking. QuickBooks Online is one of the best accounting solutions for businesses of all sizes and in any industry.
If you are struggling with your accounting needs, it is important to seek help. By partnering with a company like BudgetEASE and using the right accounting software, you can ensure that your tech firm’s finances are in order. This will allow you to focus on what you do best - running your business. If you have any further questions, please don’t hesitate to ask.
