{"id":1424,"date":"2019-09-17T13:00:54","date_gmt":"2019-09-17T20:00:54","guid":{"rendered":"https:\/\/addison.lwh.dev\/insights\/bad-accounting-structures-doom-startups\/"},"modified":"2019-09-17T13:00:54","modified_gmt":"2019-09-17T20:00:54","slug":"bad-accounting-structures-doom-startups","status":"publish","type":"post","link":"https:\/\/addisongroup.com\/insights\/bad-accounting-structures-doom-startups\/","title":{"rendered":"Bad Accounting Structures Can Doom Startups"},"content":{"rendered":"\n

Bad accounting structures exist in companies for a wide range of reasons, and in the article, \u201cThe Five Most Common Ways Startups Waste Money\u201d by Henry Kressel and Norman Winarsky in Fast Company magazine<\/a>, bad accounting structures, made it onto the list. Kressel and Winarsky provide real-life examples of how bad accounting structures can hurt a company. They also share how proper accounting can be beneficial and provide reliable financial tips.<\/p>\n\n\n\n

When a startup company is within 3 to 6 months of running out of cash, they\u2019re in trouble, and it\u2019s most likely due to not being able to raise the necessary capital. They had convinced investors that they\u2019d be a success, and now they’re spending more money than they’re making. At this point, it will be incredibly difficult to find a new financial investor.<\/p>\n\n\n\n

Below are 4 big-money wasters<\/h3>\n\n\n\n

Prematurely hiring staff<\/h4>\n\n\n\n

While in the early stages of a young company, it\u2019s important to evaluate the needs of the company. Being in a rush to hire personnel can result in employees with little to do and cost you a fortune in the process. Instead, focus on hiring trained individuals with marketing and business development skills that can target your need to work with potential customers. This can help you to start bringing in that revenue, and after the money and connections have been established, you can branch out and increase your sales staff.<\/p>\n\n\n\n

Remaining too informal<\/h4>\n\n\n\n

While most early-stage\nventures are relaxed in the workplace and don\u2019t resort to monitoring employees,\nif it remains this way for too long, it could be damaging to the company.\nFigure out how your company is going to track and monitor the performance and\nproductivity of employees. Also, make sure that those at the management level\nare given the proper training. <\/p>\n\n\n\n

Poorly managing or marketing the product<\/h4>\n\n\n\n

There are a lot of\nreasons why poor product management can cause a startup to waste money,\nincluding:<\/p>\n\n\n\n