Starting a business is intense. When you’re in the thick of it, accounting and bookkeeping is not considered as urgent as, say, getting to a minimum viable product or figuring out your startup’s cash runway.
Yet, working with an accountant can be foundational to the health of your business and accountants are often considered small business owners’ most trusted advisors for a wide range of business advice. Get a leg up on the competition by outsourcing accounting to an expert. Not sure if your company really needs one? Here are some ways to tell:
1. If you’re unprepared to weather a crisis alone
Prior to 2020, many businesses were ready to endure small, emergency situations, but no one was ready for an event as destructive to the economy as the COVID-19 pandemic.
To help businesses cope, the U.S. government offered Paycheck Protection Program loans and tax credits courtesy of the CARES Act. Accounting services suddenly became even more essential. In fact, in a survey of small business owners, online payroll company OnPay found that businesses that didn’t have an accountant were less likely to receive government relief, expect an increase in revenue or return to normal quickly.
Additionally, 2020 has brought natural disasters, such as wildfires and hurricanes. To claim the benefits you’re owed by your insurance provider and get disaster loans through the U.S. government, you would need to have your finance paperwork in order. An accountant can help you navigate the tricky and technical waters.
While hopefully 2020 has been an anomaly, emergencies and crises put startups in a precarious position. An accountant can walk with you during a crisis and prepare you financially for the next one.
2. If you don’t have any finance experience
The safest answer to the question “Does your startup need an accountant?” is “Yes, always.” Instead of rearranging your budget and trying to find money for an accountant later, the best case scenario is to have been in conversation with one from the beginning. The exception is if you’ve started another business before and have a good handle on how the process works from a financial perspective.
When you’re preparing to launch your startup, an accountant can help you implement an airtight bookkeeping system, determine how your business should be structured and even guide you in the loan winning process. While those tasks might seem like questions Google has the answers to, you’re paying an accountant for his or her expertise, not just the ability to work with the numbers. Accountants serve hundreds of clients a year, which includes businesses of all sizes. An expert offers feedback specific to your industry and financial situation.
3. If you’re feeling stretched thin
When you’re building a business from the ground up, it’s easy to end up wearing all the hats: HR, accounting, product development and more. As head honcho, your time is extremely valuable and running the books shouldn’t be taking the lionshare of your time. You have more important things to do — making strategic hires, building connections both in the community and industry, and vision casting for the company. Finance-related tasks, like processing payroll and preparing for tax season, are easily delegated to a professional.
For example, your coffee company launched canned cold brew for the first time a few months ago. However, the profit margins per unit aren’t as high as you’d like them to be. Instead of gathering the data, building the report and then seeing where you can cut costs, allow an accountant to provide you the finished report, so you can spend time making the important decisions and delegating other tasks to your team.
It can be challenging to give up control when it’s your business. It’s your baby, you started it from scratch! But a reality check will tell you that the most successful businesses don’t magically have the capacity to do it all themselves. An accountant brings the skills and data you need to make the right calls for your company without spending all your time crunching numbers.
4. If you’re ready to grow
While accountants can assist with your business’s regular financials, the advice of an expert can also help you reach your business goals. All you have to do is bring your vision. They’ll bring the numbers.
Whether its opening a second location or debuting a new product, an accountant can provide a break-even analysis that accounts for your fixed costs, variable costs and market conditions throughout the year. This analysis will help you decide if the venture is worth it.
Additionally, an accountant provides both the 10,000-foot perspective and the minute details to help you see all sides of your company. Plus, they’ll help you take the emotion out of making good financial decisions so you can objectively reach your goals.
5. If you have to pay taxes
Everyone has to pay taxes, and unless your taxes are incredibly simple, chances are you would benefit from an accountant’s help. In fact, for businesses, tax season is year-round. Whether it’s paying estimated taxes or keeping your records in order in case of an audit, there’s always something you — or rather, your accountant — can be doing to prepare for the mid-April deadline.
Due to COVID-19, many businesses have slashed their workforces and are relying heavily on independent contractors, who get different tax documents. Additionally, the pandemic has forced most businesses to invest in an ecommerce platform, which means potentially reaching a wider audience. Taxes get tricky when you’re shipping out-of-state. An accountant can guide you through both of these COVID-related tax concerns in addition to helping you minimize your tax bill through applicable tax breaks and tight bookkeeping.
6. If you’re going to sell
Once you get past the startup stage, you might start to consider what your business is worth. An accountant can assist you in determining its value and a succession plan. Knowing your worth is especially valuable if a larger company likes your innovative idea and wants to buy you out. In those types of negotiations, you’ll definitely want an accountant on your team. What’s even better is an accountant that you’ve worked with for an extended period of time.
By finding an accountant now and developing a working relationship with them, you’re investing in your business’s future, be it enduring a storm or making it big.
The post Does Your Startup Need an Accountant? Here’s How to Tell appeared first on KillerStartups.
via KillerStartups
0 comments:
Post a Comment