You’d be surprised how many startups have failed simply because they didn’t have their finances in order. They can have the best ideas, services, and products on the market, but if they’re not making effective financial decisions and managing their funds accordingly, eventually the business will fall by the wayside. It’s understandable that when you’re just starting out, you don’t necessarily have the cash flow to afford full time staffing to assist you, but working with an accountant on a consulting basis is recommended.
But I’m Just Starting Out?
Even the smallest “one man show” startup requires an accountant to ensure they’re off to the right start and in compliance with the many, ever-changing laws in business and corporate finance. If it’s affordability you’re worried about, you may be able to utilize resources such as the RightMethod.com – accountant directory to locate an accountant in your area willing to set up a payment arrangement so that you can afford their services.
Ways an Accountant Can Help Startups
If you’re still not convinced that you need an accountant this early in the start of your business, this list of accounting services is sure to persuade you otherwise.
- New Business Formation – There is a lot to be done when you decide to start a business. An accountant can help you every step of the way to ensure you get off to a good start. Here are some ways in which they can provide assistance:
o Selecting the right business structure that will benefit you from a tax and legal standpoint.
o Applying for an Employer ID number
o Establishing a startup budget
o Setting up invoicing and collection strategies
o Set up your home office (to get the most tax benefits)
o Ensure you’ve complied with all employer laws (in the event you want to hire staff in the future)
- Small Business Accounting – There are a lot of financial responsibilities when it comes to running a business, and creating a budget in a spreadsheet is not going to be enough to remain in compliance and on top of your finances. An accountant can help you with small business matters. This can include things like:
o Reconciling bank statements
o Preparing financial statements
o Establishing an accounting system
o Training on utilizing accounting applications
- Payroll – Though you may not be quite ready to hire your first employees, you’ll need to be prepared for when you do. Your accountant can assist you with determining how to execute payroll in a manner that is beneficial to you and your staff. They can review payroll accounting systems with you and assist you in making an informed purchasing decision.
- Audits & Reviews – When you think of audits you think of taxes, however, this is not the only instance in which a small business can be audited. There are some startups that may have lenders or investors who require them to have their books audited by an independent third party. An accountant can complete the audit for you or at the very least, help you to prepare your financial books for the audit. By reviewing your books before the audit, they can point out any issues and resolve them so that you can keep your lenders and/or investors happy.
- Cash Flow Management – Business is always better when you have cash coming in that far exceeds the money you have going out. Poor cash flow management can be devastating to a startup causing you to rely on lending and credit cards to operate (debt). Your accountant can help you to set up systems to effectively manage your cash flow so that you don’t need to fall into debt so soon in business.
- Tax Prep, Planning, and Resolution – Tax time can be very stressful for the average business owner. Everything you’ve accounted for over the course of a year must be gathered to comply with local and federal laws. An accountant can help you in preparing the necessary documents and reports, locating discounts and write-offs that could lower your out of pocket expense, and resolve issues that might have resulted during tax filing such as IRS audits, payroll issues, etc.
No matter how passionate you are about your startup, managing a successful small business is extremely hard work. While you may have the best business idea in a long time, if you’re not properly managing your finances, it will have a hard time succeeding. That’s why it is important to entrust the services of an accountant on a periodic basis to ensure everything is on track. As you can see, they can help safeguard your finances so you can focus on what you do best – running a business.