Many startup founders try to cut their costs by managing finances on their own, without any kind of external help. But, by doing so, they are often making a big mistake.
Getting an accountant involved early on, can save you from dealing with serious issues later when the consequences of poor financial decisions emerge.
Here’s why and how hiring an accountant can help your startup and set you on the right track to success.
1. Help You During the Early Stages of Building Your Startup
There are many important decisions business owners need to make when starting a business venture in order to build firm foundations for their new company.
Accounting professionals can help fresh entrepreneurs make informed decisions and minimize the risks of potential failure. Some of the main areas in which the help of an accountant can come in handy are:
- financial analysis of your business plan,
- choosing the right business structure for your startup, and whether you’ll register it as a sole proprietorship, a partnership, or an LLC,
- deciding on the best accounting software to use,
- checking whether your accounting procedures adhere to the latest requirements and regulations,
- separating your private and business expenses,
- tracking your daily business expenses.
2. Improve Business Operations
The last thing an entrepreneur needs when they’ve just founded a startup is to get stuck with penalties and fines, and a good accountant will help them avoid falling into such a trap, see here.
Actions such as preparing and submitting annual accounts, bookkeeping, and doing taxes are all sensitive matters, and they need to be handled carefully and adequately, as that will keep auditors and problems with authorities at bay.
Keeping up with the latest law changes when it comes to tax regulations can be difficult and confusing to someone who is not professionally obliged to follow them. With an accountant around and their expertise in these matters, you will be able to make the most out of your tax year and choose the most-efficient tax planning options for your startup.
Your accountant will also help you stay on top of deadlines, and avoid penalties thus saving a lot of money which you can put to much better use.
Accountants are also well-trained to save you significant amounts of money by spotting legal loopholes or potential tax relief opportunities.
3. Take Calculated Risks
Besides the obvious benefits of professional knowledge and skills an accountant can provide, there is another benefit many fail to recognize.
Entrepreneurs tend to get carried away with big ideas on how to expand their business and boost their profits.
On the other side, since they are usually not directly involved with your everyday business activities, accountants are able to remain unbiased, and their contribution is invaluable when you’re considering any future plans and actions.
With the help of an accountant, you will find it much easier to calculate the risks involved with each decision and predict future consequences.
4. Boost Business Growth
When you’re ready to grow your business, a professional accountant can be one of your key advisors in creating your business plan. Accountants have a lot of experience with monitoring cash flow, and they are able to spot lucrative investment opportunities.
All the crucial decisions, such as major purchases, hiring new staff members, or making investments, will have fewer negative outcomes if they’re made with the support of a well-versed and trusted accountant.
Accountants use reliable methods such as the cost-benefit analysis, scenario modelling, and margin analysis to weigh up your options. Such a well-thought-out approach will help you manage your resources properly, plan your financial strategies, and consequently, enable the growth of your business, without putting it into many risks.
5. Save Time and Energy
When starting a new business, you will have a lot of tasks on your plate but only a limited budget and your first impulse will most probably be to save money and try to manage everything all by yourself.
In fact, research shows that entrepreneurs spend up to 40% of their working hours on low-value tasks that don’t generate profit, such as doing payroll, performing the role of HR, and hiring new employees, all of which leave them significantly less time to focus on the matters which could, in fact, stimulate the further growth of their business.
Hiring an accountant and outsourcing fiscal responsibilities to a professional can save your time, energy, and money, as well as eliminate all the stress of working on tedious tasks for which you’re not skilled enough.
Failing to acknowledge the importance of relevant financial expertise, as well as to consult a professional when making crucial financial decisions, can lead to a negative outcome when it comes to the success of startup business, and even end up in failure.