The diverse range of businesses and individuals in the crypto space, including exchanges, miners, investment funds, VCs, and others, underscores the growing importance of specialized crypto accounting services. These services are crucial for ensuring accurate financial reporting, tax compliance, and effective management of crypto-related activities.
Here are our top five tips to get you started:
- Use Crypto-specific Accounting Software
Sorry QuickBooks, Xero, and NetSuite, you’re not cut out for crypto accounting. These legacy systems are excellent at handling fiat transactions that run through financial institutions, but not so much when it comes to blockchains. That’s where crypto accounting software comes in. These programs can pull data from the blockchain and do the transaction costing for you. It’s like having a personal assistant for your accounting needs! Just remember to verify and cross-check the reporting.
- Maintain Crypto Wallet Hygiene
Wallet hygiene? Sounds fancy! All it means is having your wallets structured properly. Use separate wallets for distinct purposes, like one for NFT sales and another for paying contractors. Mixing business and personal transactions is a big no-no! Having single-use wallets ensures a clean audit trail and keeps your accounting team happy.
- Safely and Properly Store Your Wallet Logins
Don’t let “the infamous forgotten wallet” happen to you! Keep a record of your wallets, and download all of your transactions before closing any accounts. A good accounting team can sometimes identify missing wallets, but why risk it? Better safe than sorry!
- Set Yourself Up For Success
Don’t be that person who procrastinates until the end of the year to do their crypto bookkeeping. It’s a recipe for disaster! Stay on top of it throughout the year, and your accounting team will thank you. Once your processes are in place — the rest of the year will be a breeze. Organization is key here!
- Reach Out to an Expert
When all else fails, don’t be afraid to reach out to an expert in the field. It’s better to ask for help than to mess up your bookkeeping and regret it later.
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