Experts say behind every successful business, there is an intelligent accountant who takes your passion for business to the next level. Startup businesses face numerous challenges during the initial use and are often intensified by the headache of managing accounts.
Finding the right accountants for startups at the right time can find you the best solutions for business growth and efficient performance.
But, what troubles new entrepreneurs is the cost of hiring accountants and if they are worth it. This post will clear out the basic concepts and help you conclude.
- Can startups overlook proper accounting measures in their initial years?
- Reasons for hiring accountants in a startup
- Can I do accounting myself?
- Wrapping up
Can startups overlook proper accounting measures in their initial years?
No! Often small business or startup owners overlook proper accounting needs or hire an accountant to save money. During the initial years, there were few accounting tasks compared to others performed by bigger sharks in the market. However, fulfilling the duties opens up the door to new opportunities.
An accountant for a startup business can help owners in,
- Selecting the appropriate business structure
- Planning business strategies
- Understanding the need for separating business and personal expenses
- Keeping businesses updated with the latest government regulations and maintaining record details
- Help in day-to-day accounting activities and support the payroll management system and others.
- Payment processing.
- Investor relations management.
- EIS/SEIS registrations and subsequent compliance.
Reasons for hiring an accountant for startups
Accounting in small businesses shows where the business stands and how it is performing financially. Among several advantages, accounting for startups UK gives a clear understanding of past business activity.
A promising startup accounting during the early stage of a company ensures you know where your money is going, how to manage costs, control your burn rate and create financial reports that look relevant to investors.
Keeping accurate records means you can move quickly during due diligence and share your financials with partners, thus improving confidence and increasing your chances of getting the much-needed funding.
Here are a few reasons for hiring a chartered accountant for startups:
1. Improve cash flow
Cash is the fuel for driving business smoothly, which means if you don’t have sufficient cash in hand, you cannot buy equipment to meet your immediate needs. Proper cash flow control helps make critical decisions in the running and growing businesses.
A good accountant leads down efficient credit control and cash management strategies to make your business survive, cover all its expenses, repeat investors, and expand the business.
2. Reduce workload
Suppose you have a tech startup that cannot fight with others in the market. Are you going to change your business or its strategy? But, changing strategies will bring numerous other tasks in managing workflow, resources, operations, administration, etc.
Hiring startup accountants for tech startups can reduce your workload by taking charge of your daily accounting needs, taxes, payroll, bookkeeping, and maintaining compliance. Similarly, accountants are necessary for other sectors as well.
3. Manage Growth
A startup business has various needs, such as hiring the right team and funds, managing cash flow, improving customer relations, managing workflow, etc.
Hiring an accountant helps manage operations by recommending a business strategy, analysing financial reports, seeking funds, taking over financial and tax obligations, and introducing accounting tools. All these cooperatively help in faster business growth.
4. Provide advice
A tech startup accountant in London understands your tech startup requirements better than anyone. They have experience, knowledge and skills in handling businesses in your sector.
Accountants have seen numerous issues in a business and have experience in solving them with the best solutions, and they can similarly help you in need.
5. Stay ahead of trends and regulations.
Each day we see a new technological advancement that has stepped in successfully in the business sectors. Plus, the more significant hurdle for owners is to comply with a country’s changing rules and regulations.
An accountant can solve all these difficulties and ensure your business follows the latest technologies and processes and abides by the legislation.
6. Process payroll
You must implement a payroll management system if your business works with staff. An accountant can help you handle payroll in your organisation, abide by payroll laws, submit payroll taxes, maintain employee records, and perform other duties like submitting documents to HMRC, sending payslips, etc.
7. Measure business performance
Accountants help in bookkeeping, which means keeping updated records on books. They create financial reports according to the collected data and later analyse them to look into business performance.
It allows them to look for future chances for growth and expansion, risks, loopholes in the past, your financial health, and assist in making critical financial decisions.
8. Prepare your taxes
Tax laws in a country are ever-changing, and keeping yourself updated with the change is a significant hurdle. But not for accountants.
They help you prepare taxes by considering your income and expenditure. Plus, they can reduce tax bills by identifying your eligibility criteria for tax deductions, allowances, and reliefs.
9. Keep you away from legal issues
Starting and running a business requires you to comply with financial filings legally. It includes understanding the need for preparing and submitting accounts, keeping accurate records, correct forecasting and cash flow projections, preparing management accounts, filing company tax returns, and others that keep you from costly mistakes.
An accountant doesn’t let you pass through such penalties and keeps your money safe.
Can I do accounting myself?
Yes, you can, but with prior accounting knowledge! Just because you happen to be a CFO of a large multinational corporation or an accountant from Big4 doesn’t necessarily equip you with the skills needed by a startup.
It keeps you safe from legal issues and ensures you get your accounting tasks done correctly.
Accountants do more than crunch numbers; having them in your business can bring quick success rather than doing it yourself. However, as it is not mandatory to hire an accountant, you can outsource accounting or purchase accounting tools.
To build a successful, profitable and sustainable business, you need to maintain discipline and consistency in performance.
Hiring an accountant in your business can act as an excellent strategy partner that provides necessary advice at every step of business succession planning. When you focus on core business expansion activities, they focus on accounting needs and business performance.