5 Reasons Why Every Startup Needs An Accountant
One of the questions many entrepreneurs ask themselves when starting a new business is whether they need to worry about hiring an accountant so early in the game. During the first few months at least, startups are usually battling with limited funds, finding their place in their market and busy focusing on bringing in revenue.
An early-stage accountant will be able to offer a wide range of business support services. From arranging business licenses and incorporation filings when the company first starts up to managing and preparing month-end accounting and GAAP financial statements when the company is up and running, an accountant will tailor their skills and experience to suit the needs of the business. As the business grows, your accountant may also assist with areas such as cash flow analysis, budget creation and financial forecasting.
But, in case that isn’t reason enough here is a breakdown with more benefits of hiring an accountant for your startup and how to get the timing just right.
1.Getting The Business Off The Ground
An accountant can be a huge asset to your startup from the moment you decide to open up a new business. Some of the tasks they can help you with include:
- Determining the most suitable business structure, such as sole proprietorship, LLC, partnership or corporation.
- Recommending accounting software and any other financial systems that may be beneficial.
- Assisting with the development of your business plan, and in particular projections and financial analysis.
- Assisting with the opening of business bank accounts and applying for new business credit.
- Ensuring that all accounting procedures are managed in compliance with government legislation and requirements.
2. Focus On Your Core Business
When you hire an accountant to take care of the day-to-day financial legwork, the budget management and the burden of compliance and legislative responsibilities, you can focus on managing your core business.
That means spending less time doing battle with balance sheets and more time on creating partnerships, developing relationships, building your product and on sales and marketing.
3. Prepare Quality Accounting Information
In addition to preparing and managing business accounts, an accountant can also help you to obtain business credit or raise equity funds by preparing high-quality financial reports and information to prospective investors. If you can’t prove to investors that your business works on paper, you’ll have a tough ride when it comes to securing the funding you need to grow.
Equally important is the quality of the financial information the accountant prepares for the business. Well-managed accounts will ensure you always have a firm understanding of the financial position of your business and enable you to make smarter and informed decisions as a result.
4. Easing The Pain Of Tax Season
Managing business accounts is a challenge in itself, but preparing business tax accounts is quite another. You’ll need to make quarterly estimated tax payments against income from business revenue, self-employment, dividends, rest, interest and other sources. Fortunately, if you have an accountant, you can leave the hard work and calculations to them.
5. Making Growth Easier
Knowing when to expand can be a guessing game. How far will your finances stretch without negatively impacting your business? You could go with your gut instinct of course, but if you really want to maximize the potential of your business while minimizing risk, tapping into the business acumen and experience of a good accountant can be a wise choice.
Many startups fail because of poor financial planning. While an accountant may be an expensive cost, they can be invaluable allies for a new business. Not only will your business benefit from their expertise and years of industry experience, but you can also sleep easier at night knowing that your bookkeeping and taxes are all in order and that you have an expert by your side who will help your business to prosper and grow.