When you’re just starting, you may wish to wear numerous hats, taking on duties ranging from marketing to bookkeeping and doing these functions yourself.
However, as your business grows, the amount of paperwork will undoubtedly increase, and you won’t be able to handle everything on your own.
Accountants can assist you in planning and monitoring your finances by providing supporting documentation, backups, models, and solutions, allowing firms to gain various benefits by following the plan.
Because accountants can see beyond the numbers on financial accounts, having them on the team will increase a company’s ability to make decisions.
Let’s take a look at what a startup accountant does and how they may assist a business to thrive.
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1. Provides business startup advice
Financial guides with business accounting experience have seen various startups grow in multiple industries. They are a precious source of business advice as they will try to learn as much as possible about the startup owner and their ambitions.
The accountant will be the “critical” friend who can advise on significant financial concerns and recognise opportunities and problems during the startup process.
Even if the company has been in operation for a while and is ready to expand, an accountant can perform a financial health check to verify the owner has everything in order.
Almost every startup aspires to make a difference, generate significant money and expand its operations. However, a lack of planning or financial backing for these decisions might negatively influence all of them.
Businesses should be able to make sound investment and growth decisions with the support of a professional accountant. Cost-benefit analysis, break-even analysis, margin analysis, and scenario modelling help make proper judgments.
All of these indicators will aid entrepreneurs in developing a future resource management and finance strategy. Furthermore, the indications help predict future revenues and chances for corporate expansion.
2. Creating a budget
Another critical step in starting a business is creating a budget. The main goal of a budget is to identify various expenses required for multiple elements of your company, such as marketing, employing new staff, purchasing equipment, and upgrading your product or service, among other things.
It’s also helpful to have an accountant on hand to successfully allocate money to all of these company operations, as it’s critical to properly establish what essential business products are and how much money you should spend on each of them.
Since sticking to your budget is critical to your startup’s success, you can rely on your accountant to keep track of everything and avoid financial mistakes.
Poor accounting and financial planning play a significant role in business failure. To avoid this worst-case situation, get your finances in order from the beginning and hire a trustworthy accountant.
3. Strong business plan
A business plan is essential for laying a solid foundation for your new company.
Many entrepreneurs make the error of not enlisting the help of a financial specialist while drafting this crucial document.
According to statistics, 65% of businesses involved in non-manufacturing products and services need outside funding to capitalise on a new opportunity.
Engaging an accountant to ensure that your financial records are accurate and ready for investor scrutiny and any necessary information of interest to potential funders is ready will increase your chances of securing an investment.
4. Saves time
The last thing a startup founder should do is spend time on work that could easily be outsourced or delegated to others.
Time is a crucial resource, and experts recommend that business owners use a qualified accountant who can handle bookkeeping, tax, business counselling, and growth services.
Once you select a qualified accountant, you will be able to focus on your principal responsibilities while eliminating all of the tedious financial and bookkeeping duties.
Since an accountant may spend their lives on various tasks, businesses can save a lot of time. Budgeting, inventory management, customer invoice preparation, and payroll administration are just a few examples.
5. Determine profitability
Many businesses generate substantial sales revenues, but this does not necessarily imply that they are profitable or sustainable, which might lead to their financial downfall.
Not all entrepreneurs are skilled at leveraging their assets to create revenue, and many fail to spot significant financial drains. An accountant can spot these cash leaks and prevent your business from falling.
Aside from that, corporate asset management is a complicated procedure that you can’t handle independently. Therefore you must hire accountants to hold various financial jobs.
For instance, they can act on behalf of company owners for financial purposes, ensure the proper use of business property, and supervise business activities and other staff.
6. Loan application
A skilled accountant also will allow you to apply for loans more efficiently than ever before. Your accountant can help you prepare and file the applications.
If you fill out the application yourself, it will be easier because you won’t have to look for and gather financial information. You’ll have all you need with regular up-to-date financial statements from your accountant.
7. Debt management
Debt may be burdensome. It is difficult to manage debt, whether a large mortgage or a slew of tiny payments owed to different companies. Even a minor payment collection might get out of control and threaten your business.
Startup accounting firm assistance allows you to keep track of your payables and receivables. An experienced accountant can help you streamline or decrease the load with startup debt consolidation.
8. Tax compliance
Startup owners can be under a lot of stress during tax season. It is where your accountant enters the picture. Your life will be considerably easier during tax season if your accounting is done correctly throughout the year.
Every business in the United Kingdom must keep its accounts and financial data up to date to comply with HMRC regulations.
Corporate tax filing can be a stressful and time-consuming process, but with the assistance of your accountant, you can be free of all this paperwork and have the comfort of knowing that everything is correct.
You can also get recommendations and suggestions on an allowance while planning your tax strategy! You won’t have to worry about missing out on tax breaks or non-compliance.
9. Better business cash flow
Any business owner’s top priority is cash flow management. Many prosperous businesses fail due to running out of cash at the wrong time and being unable to pay their employees or suppliers. Even the most lucrative company will not be able to stay in business for long if its expenses are too high or payments come in slowly.
Accountants are well aware that a company’s revenue fluctuates, as does its expenditure. As a result, financial experts can assist you in predicting the impact on your cash flow, identifying if a working cash flow gap exists, and taking safeguards to ensure an ideal quantity of money is accessible today or in the coming few months.
Payday will be a lot less stressful, and your supplier connections will also improve.
How to hire an accountant for a startup?
Since accounting is a broad field, you should find one with specialised skills. Someone having a bachelor’s degree in accounting or certifications may not be the perfect fit for your company.
There are two different kinds of accountants who work in startups. The first is public accountants, who are self-employed and usually work for small enterprises or individuals to assist with financial planning, such as tax preparation.
A management accountant works with firms to simplify financial processes and records, guide strategy and planning, and provide data and reports, which may be the most important for startups.
Similarly, there are different types of an accountant. You can consider your business needs, evaluate if a full-time employee is necessary, and ask the correct questions while interviewing a candidate are all part of learning how to hire an accountant. Your search may take some time. However, in the end, you’ll select a trustworthy accountant.
Hire Startup Accountants
Work with a London-based accountant for tax, accounting, payroll, & EIS/ SEIS needs.
Final thoughts
Startup accountants London may make a big difference in your business. We can help you accomplish your vision and drive healthy long-term business growth by improving your information, planning, and efficiency.
Because your accountant will be managing sensitive business data, you should carefully select and properly vet your accountant before engaging them.
When it comes to your finances, the most important thing you can do is recognise when you need expert help and then hire an accountant to help you maintain your company’s fiscal health.
