A new startup has to deal with a lot of issues at once. It’s hard to get the business financed and even if you do, the money is always tight for the first couple of months. The business also needs to establish itself on the market and to start a promotional campaign.
With all of these tasks to juggle, accounting usually gets pushed aside as something that can be dealt with later. It’s a mistake to do so because accounting could save you a lot of money and allow you to run the business more freely.
Setting up a business
It’s a good idea to have an accountant before you actually start running the day to day operations of your business. The most important decision to make right away is how your company will be set up, which will also determine how it will be taxed.
This decision can save all of your personal savings in case something happens and the company goes bust once and for all. Corporations and Limited Liability Companies are the two main choices you have and an accountant could help with making the choice that’s best suited to your business.
Too much work
The tax code is so complicated that dealing with it could take up all of your work hours. Small business owners already have a lot to handle and their attention is better used for dealing with long-term planning and setting up the business itself.
The smart thing to do is turn to one of your employees and provide them with an opportunity to acquire advanced diploma in accounting. That way, they could learn on the job and grow their skills as the company grows around them. It will also lighten the workload for the managers.
When you’re creating a business, you need to consult with as many experts as you have available. The plan should deal with your future projects and your projected growth and development. This is why you should consult all the experts that your business may need in the long-run.
One of the most important consultants you could have is the tax accountant that will help you with figuring out all the tax cuts and benefits you could use as the company grows.
Investors like nothing more than finding a business that’s already sustainable on its own and injecting it with enough capital to reach its full potential. From their perspective, that means that they are making money without doing any of the work. A good accountant can help you attract such an investor.
Having a good accountant means that your business has the infrastructure needed to grow and that it can handle the taxes that will also multiply with this change. When you’re discussing these matters with the investor, an accountant should be present and guide you through the process.
Some loans are supported by the government, meaning that the government guarantees for your loan, allowing you to have lower interest rates. This is only the case for a few selected industries and fields of work that are beneficial to the general public. If you’re able to apply for such a loan, you should.
An accountant is necessary for servicing such a loan because your business and its finances are going to be monitored much more closely than with any ordinary financial institution in which the government isn’t involved. Needless to say, your paperwork needs to be spotless if you want to use such a financial service.
As soon as you start running a company on a day to day basis, you’ll notice that having a good cash flow is often more important than having a large fund to use for investing. The cash flow is used to cover daily expenses and deal with all the small things that actually keep the business going.
Managing and planning with regards to your cash flow is what will keep your business open during the first couple of months. A skilled tax accountant is best suited to do this for you because they know your business to the last detail.
In the end, small businesses need to keep growing all the time if they want to keep their competitors at arm’s length. The only way to do so is to have the best team of employees at your disposal. A good tax person will help you grow the business twice as fast if you’re willing to trust them.
This is an additional expense as well, but it’s more than worth it when you take into consideration how important it is to diversify and expand the business right away.
A startup can really benefit from having an accountant right away. Their skill set will both save you money and expand your company.