Businesses aren’t built overnight, and any business worth your time sits on top of an entire group of professionals working day and night to make it a success. The right accounting firm can help you go from a small business to a successful empire, slowly but surely. Hiring an accountant lets you achieve more than a person who submits your tax returns or takes care of your accounts. They can help you comply with legal requirements, save money to generate more profits, reduce risk, and plan for consistent growth and future quarters.
Since most of your everyday decisions are dependent on cash flow, you need an experienced accountant to handle your daily needs to be able to take out time for your venture.
Does Your Startup Need Accounting?
The Accounting Today 2022 Year Ahead survey reported that 51% of firms believed keeping up with tax regulations was one of the biggest hurdles they faced every day. For you as a business owner, time is of the essence, and the more time you spend focused on your company’s financial requirements, the less time you can spend making other important decisions.
Why does a company need an accounting firm? Can it survive without an accountant? Perhaps you can, but only if you are an experienced accountant yourself.
Hiring a CPA full-time is often too expensive, especially for early-stage companies. A fractional accounting firm can fill the gap in terms of a financial partner as they can provide you with all the services that you need without any long-term commitment or significant costs.
An accountant will allow you to view your cash inflows and outflows in multiple layers. Their perspective can help you cut costs, increase investment into viable potential income streams, and tweak other operations.
Startups need accounting firms just as much as bigger businesses. They might have smaller roles, requirements, and trajectories, but if they plan on expanding in the future, they need an accountant to help them with these initial hurdles. An experienced accountant can:
- Help you put your money in investments that are worth your time.
- Provide an understanding of the resources that pull the most growth versus those that don’t provide a viable output.
- Plan ahead for the upcoming quarters keeping your current financial restrictions in mind.
The earlier you hire an accounting firm, the easier it is to realize your long-term goals and begin working on them from day one.
Why Startups Need an Accountant
Around 70% of startups don’t have a professional accountant to depend on, and half rely on the owner to get the job done. The results are shocking when one considers that 60% of small business owners don’t trust their accounting knowledge. According to the US Business Bureau Index, 20% of startups that aren’t connected with an experienced accounting firm struggle to last their first year. The following sections explain the value accountants can add to an early-stage company.
1. They Reel in the Sharks
If you struggle to gain the right kind of investors or reel in that investment to grow your company to the next level, you may need an accountant to add life to your quarterly reports or business plan.
Accountants can help you impress investor sharks as they can use statistics and mold them into a pitch, highlighting the stronger aspects of your business. As an investor will probably go through your numbers to check your claims, a bad financial projection can hurt your chances.
Accountants can also help you pick the right kind of investor to target. Since they know your company’s finances, they also understand the investor who can benefit from you the most. They are the best advisors when you need investment by a certain deadline.
2. Accounting Firms Can Identify Dead Weight
Perhaps your company’s quarterly charts or milestones are moving at a snail’s pace. That may be because it is carrying around a lot of dead weight. A company may not benefit from every investment, resource, or equipment it owns. Accountants can help you realize fruitful efforts versus those that reap no profit no matter the investment.
Letting go of the investment can free up space for more cash flow and allow the profits to start pooling in.
3. Legal Benefits
Accountants are well-updated with the regulations that keep changing each year. In fact, that is what they are paid for. These advisors can keep you away from legal implications by helping you plan for taxes, file them on time, and stay away from unlawful activity.
Accountants can also prevent corporate theft by being able to catch discrepancies ahead of time. All of the legal benefits can help your startup avoid bad press and help it maintain consistency in growth.
4. Startup Requirements
Hiring an accountant doesn’t just help you in the early stages of your business. It can also help you draft the best marketing and business plan that sets you toward the right investor and marketing strategy.
With an optimized business plan, you can understand what your business needs and how long it takes before it starts breaking even. This can help you set realistic standards and avoid disappointment.
5. Accounting Tools
Another important part of running a startup is keeping up with the times. An accountant that is dedicated to your firm knows everything about the structure. Thus, they can connect you to the accounting tools best for your particular business.
With the right kind of accountant, your startup won’t need to mass-edit flawed reports anymore. You can get the numbers right the first time.
Startups can require the support of many stakeholders that help the business grow bit by bit, including customers. But every startup is different, and various products require a new approach during the initial marketing processes.You may not be able to invest in a full-time accounting firm. However, hiring an individual professional accountant and handing over the finances to a professional may be possible. For more detailed information and advice, schedule a Free Consultation today.