Creating a startup can be daunting because you have to figure out a way to turn an idea into a thriving company. During the earliest stages, the founder would often take on different roles – including managing the business’ finances.
If you’re not a whizz with budgeting and managing your finances, one wrong move and you might end up tanking your company. That’s why your startup needs a trusted accountant on your team so you can build a solid financial foundation early on. But if you’re still not convinced hiring one is the right decision, maybe the benefits below will make you reconsider.
Receipts, invoices, and bank cheques are only a few documents your accountant should keep track of. As your startup grows, so do your financial records. Part of your accountant’s job is to keep your financial records organized, so when tax season comes, you’ll have no problem filing an accurate report.
If you want to make your operations go smoother, your accountant can also install accounting software. This way, you’ll be able to access your financial records without having to go through a ton of paperwork. It will also be easier to stay up to date since your records will be available on the cloud.
Managing your startup’s cash flow is another pivotal role of your accountant. Since they have access to your financial records, they’ll be able to pinpoint where you could cut down on costs and make better financial decisions.
Considering managing cash flow is one of the biggest challenges a startup can face, having an accountant will ensure your company stays at a positive cash flow while still allowing it to grow.
It’s always good to have enough funds in your startup to help cover the cost of operations, growth, and marketing.
Your accountant can guide you into securing funds by creating financial reports to attract investors and negotiate bank loans. They can also assist you with other financial options, so you’ll know the pros and cons of each before setting up a plan to obtain it.
Since you’ll also need to repay your loans eventually, your accountant will also create a solid repayment plan that allows you to budget so your startup doesn’t end up in debt.
If tax season isn’t your favorite time of the year, your accountant will take care of filing and paying your taxes on time so your startup stays compliant. They’ll also be able to determine which tax credits, deductions, and exemptions your startup qualifies for to lower your tax bill.
State R&D Credits, Retirement Plans, Work Opportunities, and Healthcare are a few tax credits available for small businesses to take advantage of, so make sure to ask your accountant which of these you can apply for.
Aside from tax deductions, your accountant will stay updated on the latest tax news. So if there are any changes that will affect your operations, they'll be able to inform you immediately so you can avoid penalties or fines.
Even if your accountant has a strong strategy for managing your startup’s cash flow, it’s still best to plan your budget for the upcoming year. Part of your accountant’s services is to create a financial report based on the company’s records and statements so that you can keep track of its financial health. Depending on your needs, they can prepare these weekly, monthly, or at the end of the year.
From there, you can make adjustments on how to cut down expenses, maximize tax deductions, and keep a healthy cash flow while still remaining compliant with the tax law.
Whether your old business plan needs improving or your startup is ready for a new one, your accountant can help you develop a new strategy that focuses on its growth.
Bonus points if they have previous experience in your industry since they’ll have knowledge of the ins and outs of how to make your startup successful. They’ll mainly focus on the financial aspects of your business, such as your capital, expenses, and financial projections. A good plan will help you avoid any potential financial issues, but it’s also best to create a contingency plan in case of unforeseen events in the future.
Building a startup from the ground up isn’t an easy feat, especially if you’re the founder. You often have to juggle several roles and responsibilities to get your company steady. However, having an accountant during the early stages of your startup to help you build a solid financial foundation. They can help you with bookkeeping, budgeting, and filing your taxes to ensure your company grows at a steady pace without the risk of insolvency.
Disclosure: This post is sponsored.
We believe in transparency and honesty. Therefore, we want you to know that this article has been sponsored by Lear & Pannepacker, LLP. While we have received compensation for publishing it, we assure you that we only accept content that meets our high standards of quality and relevance to our readers. Our opinions or insights shared in this post remain impartial and aimed at providing value to your experience on our site.
Alex Quin is a full-stack marketing expert and global keynote speaker. Founder and Chief Marketing Officer of UADV Marketing - a member of the Forbes Agency Council.
