
How Important Is Accounting for an Entrepreneur? - switzerland
And what do I need to know more than the runway and burn rate?
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Digory
Very important to take care of. You’re responsible to government, investors,
your team, and your customers when it fails.

Not so important that the entrepreneur must do the accounting. It’s a skill
that can be hired out better than other skills. I wouldn’t hire a financially
illiterate person to run a startup, but I wouldn’t normally look for an
accountant to run a startup.

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jlturner
Very. Assuming you’re in the US, I’d recommend reading the IRS literature
related to your type of business (C-Corp, S-Corp, Partnership LLC, Sole
Proprietor LLC).

If you’re business structure is “pass through” (ie. S-Corp, Partnership, Sole
Proprietor), then you should also read the IRS 1040 instructions and do your
taxes (mostly by hand) and file here (for free):
[https://www.irs.gov/filing/free-file-fillable-
forms/](https://www.irs.gov/filing/free-file-fillable-forms/)

The IRS guide will tell you how you should handle your accounting, what you’re
allowed to claim as business expenses for tax purposes, how to handle
employees vs contractors, and more. Also tax deductions are crucial for
businesses as they’ll help offset expenses to make your business more viable.
Good luck!

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topicseed
Financial statements are a must — knowing what each means, tricks used, how to
present them, understanding what each financial statement exposes, and so on.

Then, understanding the various reasons accounting exists: taxes, official
records, but also for your own eyes and brain — they represent the health of
your business!

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forgotmysn
cant overstate the importance of accounting knowledge for founders. its how
you will communicate results to investors, and how you will effectively plan
for the future.

if you have never managed your own P&L, i would definitely recommend taking
some Khan Academy courses or something. understanding depreciation, cash flow,
AP & AR are all absolutely necessary when starting a business.

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ak39
It is less important than product market fit at the start. Forget accounting
here.

If you are already generating revenue and there is month on month increase,
then accounting is more important than product development. At this stage just
hire an accountant.

