How to set up your business administration as a Startupper in the Netherlands
In a land known for its elaborate administrative body, setting up your own business administration may seem like a daunting prospect. However, once you’ve organized your administration in a convenient manner, keeping to it will be as easy as doing your household chores. Moreover, if you administer well, you’ll always have a good overview of your finances and other company affairs.
So, in order to help you get started on your business administration, we outline the most important elements in this article.
What are the essential elements of a good business administration?
In your business administration, you have to track at least the following:
- Your working hours and the billable hours for your various customers/clients
- The number of free working hours that you have left
- Your costs, income, and revenue
- Outstanding credits and debits
- The BTW (VAT) that you can request back during your BTW-aangifte
- The amount of taxes that you have to pay
- Your invoices, quotations, and contracts
In addition, you should keep your calendar up to date, and take note of all the agreements that you make with customers/clients and/or business partners. If you keep your administration well, this will also help you to determine your hourly rate or determine project prices, and give you the numbers to back them up with.
Should I do my own business administration?
This is a very valid question, because finance and administration may not be your forté. Accordingly, it may take you much more time than any bookkeeper would be busy with it, which you could spend on earning real money or expanding your business.
However, if you’re just starting out, learning to do your own administration is an invaluable skill! It’ll give you a better overview of your company affairs, and more feeling for the way that your company develops over time. In effect, you’ll be able to make better decisions, because you can base them on actual numbers instead of what you think is good or simply feel like doing at the moment.
Finally, if you keep your own administration, you can also check your eligibility for subsidies, allowances, and tax discounts. For example, you can track whether you work at least 1.225 hours per year, which makes you eligible for entrepreneurs’ allowances (ondernemersaftrek), such as the private business ownership allowance (zelfstandigenaftrek) and the tax relief for new companies (startersaftrek).
Advantages of a bookkeeper
Of course, this doesn’t mean that you won’t benefit from a bookkeeper at all; he/she can help you to do your administration more efficiently and check if you calculate everything correctly. In addition, a bookkeeper can advise you on everything finance, administration, allowance, and tax-related. Finally, your bookkeeper can recommend bookkeeping software and help you to organize it so that you can make effective use of it together.
How to organize your company’s administration
The cheapest and most accessible solution is of course by using Excel. Especially if you’re used to working with Excel, it can be the perfect program to organize your business administration with. However, there are also various online bookkeeping programs, such as Zoho Books that are specifically designed for business administration in the Netherlands. Most of these allow you to generate invoices in your own house style too, which does much for increasing your professionalism as a starter.
#Pro-tip: The bunq business bank accounts offer convenient functionalities, such as automatically segmenting your BTW (VAT), scanning your receipts and invoices, and various integrations with bookkeeping software.
How do I handle my debit risks effectively?
In most startupper industries, you first offer your service and send your invoice after you’ve completed the assignment. However, this puts you at a risk, because you’re dependent on your customers/clients actually paying you the invoice. Luckily, defaulters are very rare in a well-administered country such as the Netherlands. And, if someone does try to default on you, it’ll be very hard for them to actually get away with it.
So, simply send your invoice the day after you’ve finished the assignment. This is the most common moment, and if you do it this way, you can be sure that you and your assignment are still fresh in your customer’s mind. In effect, your customer won’t be confused about what your invoice is for, which increases the chances of your customer paying the invoice right away.
However, since many people are busy and have multiple things on their mind at the same time, chances are that your customer will postpone paying your invoice. Or worse, postponing may eventually lead to your customer forgetting about it.
How to ask for your money in a friendly manner
In order to prevent yourself from writing emotional e-mails when you want or need your money, simply prepare a few template e-mails for invoice reminders and earnest pleas. In this, determine for yourself how long you’ll wait with sending your reminders (e.g. 1 week) and earnest pleas (e.g. 2 weeks), and keep track of this in your administration.
This way, you can calmly think about how you can urge your customers to pay you in a friendly manner (you can also templates for this online). This increases the likelihood of them doing so sooner rather than later too, and it saves you a lot of emotional turmoil when payments do come in later than you expect them to.
#Pro-tip: if your projects take up a considerable amount of time, money and/or other resources, ask for a 20-25% prepayment before you begin. This way, you’ll get a more regular cash flow because you’ll be paid more regularly. Moreover, a pre-payment also ensures the commitment of both you and your customer to the project and its success.