You may think the only requirement for creating a startup is a good business idea. However, the most common reason a venture sinks before it gets the chance to get off the ground is the lack of financial planning and organization.
So to help prevent your startup from succumbing to the same fate, hiring a professional accountant on your team can benefit its long-term growth. But if you’re still not convinced that having an accountant on your team is the right move, perhaps knowing what skills and expertise can bring will help you reconsider.
1. Take Away Accounting Responsibilities
Forming a startup from the ground up can be a hectic experience. If you’re the company’s owner, you’ll most likely handle most of the responsibilities at the beginning – from creating your product or service, managing employees, and getting funding.
Hiring an accountant will help lighten your duties since they’ll handle the financial aspect of the business – allowing you more time to focus on other aspects.
Having an accountant at the early stages of your startup can also be beneficial. They’ll experience growing the company with you, making it easier for them to manage your finances in the future since they already know its history.
2. Organizing Financial Records
Bookkeeping may be one of the most time-consuming responsibilities in accounting. So if you don’t have the time to keep your records straight, hiring a professional accountant will take this task off your hands.
Aside from bookkeeping, an accountant must keep many financial records organized to keep them accurate and up to date. Installing accounting software for your startup will make their jobs more efficient, so keeping track of receipts, invoices, cheques, and financial statements is less hassle.
This also makes your financial records more accessible since you can access them online since most are stored on a cloud-based system.
3. Ensuring Tax Compliance
If you’re not a fan of tax season, you no longer have to worry about filing and paying your taxes since your startup’s accountant will be responsible for it.
As long as they keep your financial records accurate and updated, finishing the process will be a breeze. If they’re reliable about making deadlines, you no longer have to worry about your startup being tax compliant.
Similar to accounting software, your accountant can also automate the preparation of your taxes by installing tax filing software. Aside from speeding up the process, it also provides real-time updates on tax regulations and changes in the deadline to keep you informed.
4. Minimizing The Tax Bill
Aside from filing and paying the startup’s taxes, an accountant will know which tax deductions and credits your company will qualify for. If eligible, this will reduce your annual tax bill.
For instance, the work opportunity tax credit and retirement plans startup costs tax credits are a couple of programs that startups can qualify for. Once your startup qualifies for one, keeping detailed records of your transactions should help keep your records accurate. Filing on time and attaching the right forms to your startup’s tax return will ensure a smooth process.
5. Budgeting And Financial Planning
Since your accountant will have the financial records of your startup, they’ll be able to formulate a smart budget and financial plan for next year
By creating weekly or monthly financial reports, they can see your start’s financial health. From the data, they can pinpoint which areas your startup can reduce unnecessary costs and build up a contingency plan to prevent insolvency. They’ll also be able to formulate an effective strategy for increasing your income to expand your operations quickly.
Predictions will also give your startup an estimate of which potential risk you can execute that won’t hurt your operations. Overall, this will provide your startup with a cohesive plan for your finances.
6. Planning Startup Growth
Since the purpose of a startup is to grow quickly with your innovative product or service, planning your expansion with an accountant can help ensure its growth. Since the reason why most startups don’t survive is because of the lack of funds or planning, you can create a realistic plan of action with your accountant to ensure the risks you take won’t hurt the company’s finances.
Bonus points if your accountant has experience within your industry since they’ll know the ins and outs of what strategies will work on capturing your market. If not, they’ll still be able to provide you with sound business and financial advice on how to keep your operations afloat.
Looking For A Professional Accounting Firm?
If you’re looking for a professional accountant for your startup, working with a reliable accounting firm such as Lear & Pannepacker will ensure your finances are in good hands. They offer bookkeeping, auditing, business advisory, and financial planning services to accommodate your startup’s accounting needs. For questions or inquiries, visit their website now for more information.
