Cornerstone, an accounting and analytics company, advises startups in Hong Kong to keep their records straight. They’re the the Hong Kong gold partners and advisors for ‘Xero‘ cloud-based accounting software that startups can access via mobile and on the web.
Adrian Lai, managing director of Cornerstone said many startup founders in Hong Kong have a lot of passion but they are disorganized when it comes to administrative work. “They want to go pitch for Series A, they fundraise or to get some sort of external investment, and then it’s a mad rush to try to get some numbers together,” he said.
Lai thinks startups and SMEs need to be disciplined from the beginning: To get their administration and accounting sorted out. He sees too many clients waiting until the last minute to pull numbers together. “Not only are the financials important to external investor,” he said, “but savvy investors also want to find out about whether or not controlled processes of the organization within a startup actually is solid.”
Keeping a good record of expenses is important when it comes to filings. Lai suggests entrepreneurs to utilize different software applications to make administrative work easier. For instance, keeping expense receipts together using Expensify, a smartphone app that takes a picture of your receipt, gets coded and goes into your accounting software. Lai also recommends simply getting a binder and dropping the receipts into a monthly slot to keep the receipts in order.
Director and COO Angie Wong also advises startups to keep personal spendings separate with business related expenditure, in order to give the small businesses an idea of how they are actually doing financially. Wong said startups, which mix their finances often, think they are making money because there is cash in their bank account.
“Because every time when they are short on cash, they can take money from their personal account depositing into their business account,” Wong said.
Lai said the cash flow management is crucial, and that’s when Cornerstone comes in to help startups and SMEs. The two-year-old startup provides four core services: Cloud-based solution architecture, accounting and analytics, marketing, web design and e-commerce.
Both Lai and Wong have over a decade of experience in accounting and founded Cornerstone because they saw a gap in the market where traditional accounting was only available for recording purposes to file taxes. They think small businesses should have the same information as big companies in order to make decisions on a much faster basis about cash flow and where to put their budgeting.
This post is originally published on StartUpsHK – a blog on Hong Kong’s startup community