Startups are often hesitant to hire an accountant during the initial stages.
Usually the reason is lack of funds, occasionally combined with a desire to do it all alone. The truth is the time for a startup to hire an accountant is as soon as possible.
In the best of scenarios an accountant should be hired before a business plan is even drafted. The benefits of hiring an accountant so early are vast and plentiful.
A startup with an accountant looks appealing to investors, can help with growth and cash flow management, and allows you to focus on other aspects of your company instead of the money.
Keep reading to discover 5 reasons why your startup needs an accountant today!
1. Please Investors
One of the biggest benefits and reasons for hiring an accountant for your startup is the appeal for investors.
This is a classic textbook example of having to spend money to make money. By hiring an accountant early, investors are able to see that you are serious about your business. Your finances will be in proper order and well documented.
When it comes to pitching ideas and convincing people to believe in a dream, entrepreneurs shine. But, when it comes to providing hard numbers, statistics, and projections, entrepreneurs stumble.
This is because accounting is such an in-depth and complicated field. Hiring an expert who can generate the reports that will answer investors’ questions before they’re asked will set your startup for success from the beginning.
A company that isn’t accounting for and planning for future growth is a company that will fail. Growth is a natural part of any business. But projecting growth requires projecting finances out.
This means studying the current financial records, establishing a trend and projecting that trend forward.
While also developing a marketing strategy, finding investors, hiring employees, acquiring inventory and equipment, etc. Hiring an accountant allows you to focus on actual ideas for growth and expansion while relying on the accountant to show you the reports that support the new idea for growth or not.
3. Monitoring Cash Flow
One of the biggest concerns for startups is cash flow. Having cash on hand is crucial for a startup. This is to provide a cushion for the company should a surprise or risk of loss become realized.
Accountants will be able to provide well informed advice and guidance on which endeavors to pursue and which to avoid. This will help to reduce the risk of pursuing ventures which could result in losses.
Having a well-managed and controlled cash flow will help to ensure your business is prepared for any eventuality. Good or bad.
4. Free Up Your Time
Hiring an accountant will free up your own personal time while this may seem like a selfish benefit. This actually benefits the business as well. By hiring an accountant to handle the financial aspects of the company instead of doing it yourself with startup accounting software, you’ll be allowed to focus on other aspects of the company.
Having your time devoted primarily to accounting will leave gaps in leadership and guidance in areas like marketing, operational strategy, and even typical startup concerns like acquiring inventory and employees.
Your time is valuable, and your input is needed in all aspects of the business. After all this is your company, you own it. The person you answer is you. Instead of trying to be everywhere and do everything, allow an accountant to handle one of the biggest aspects of any startup. The finances.
Startup accounting software can certainly help keep finances organized and well documented, however, hiring an accountant is the best way to save yourself some money come tax season.
With tax laws and policies changing every time you turn around, it’s easy to imagine entrepreneurs getting confused and overpaying. All in an effort to ensure they don’t get in trouble.
Hiring an accountant will save you from paying taxes you don’t need to pay. This will increase your cash flow as well allowing you to focus on future growth and expansion.
Accounting for Your Startup
Accounting for your startup can be a daunting and tiresome task. Taking up much of your time unnecessarily and pulling you away from other important aspects of your business.
Hiring an accountant will set your startup for success by making it attractive to investors, helping with future growth, and even saving you money on your taxes.
Don’t delay and hire an accountant for your startup today.