There is hardly any large-scale business that operates without an accountant. Most of them have a team of professional accountants that help them in making better financing decisions by keeping the cost under control.
Startups and new businesses need an accountant too. Yes, you can manage your startup yourself but hiring a professional accountant has benefits beyond your expectations.
Over 40% small businesses reported that bookkeeping and taxes are the worst part of owning a business. In another study, 74% of business owners said that they have no clue how ghost assets impact their books while another 49% said they do not know what ghost assets are.
If you own a startup or planning to launch a new business, you need to hire a professional accountant.
- Help in launching the business
An accountant hired in the early days of the business will help you make right decisions right from day one. He can help in laying a strong foundation of your business by choosing the most appropriate business model such as sole proprietorship or partnership or Limited Company.
Business owners normally do not have much idea of how to setup a business with strong financial foundation. Much of it is linked to the way you setup the business. An accountant will guide you what works and why you should do it.
- Accurate financial forecasting
New businesses have to create forecasted financial reports for the first year where they have to report forecasted revenue, sales, expenses, and cash flows.
The progress and growth of your business depend entirely on these forecasted reports. Understating expenses will hurt breakeven and revenue for the first year.
Everything depends on the forecasted statements. There is no one better than an accountant who can forecast estimated budget and expenses.
- Expert advice
Let’s admit it, not all the entrepreneurs are experienced. This is one reason why 50% of small businesses fail in the first four years.
Having an innovative business idea is one thing, but starting and running a business is another thing. There is a heck of a difference between the two.
You need advice. You need expert advice.
The best person who can guide you and your business is an accountant with right experience and skills. An accountant can give professional advice on pretty much anything and everything related to finance and accounting.
- Financial analysis for business planning.
- Which accounting software to use and why to use it.
- How to open a business account in a local bank.
- Guidance on which bank is most appropriate for your business.
- How to track and record expenses.
- Guidance on how and why to keep business and personal accounts separate.
- Minimizing tax
Yes, accountants help reduce tax. There is nothing illegal here. They do it legally.
Your accountant will analyse your financial statements and will ensure that you are getting all the possible allowances for tax relief. You have no idea how much you can save with the help of government and third-party allowances.
Besides, the accountant will try to make your business eligible for more allowances and government reliefs. This is one area where nobody can beat an accountant. I mean they know how to save money for their business.
While your accountant is busy minimizing tax that you pay, your job is to make sure that he is not misinterpreting the financial reports to gain financial benefits. This should be avoided.
Stay in touch with the accountant so as to ensure he is following the standards and not trying to save money above and beyond what your business is actually eligible for.
- Raise funds for your business
Perhaps the best benefit of having a professional accountant in the team is that he can help you raise money for your business without any risk to your business.
For instance, if your business is short of liquid cash and needs money urgently, an accountant can help issue an overdraft or crowdfund a specific business unit or a new product.
Of course, this is something that you can do yourself but an accountant will do it professionally. He can create reports and show you how much exactly you need, how quickly you can repay it, and how the funds will be used to ensure you do not run short of cash again.
This is something that entrepreneurs cannot do.
Accountants are also helpful in getting loans and finding angel investors for your business. This is specifically helpful in the early days of the launch. Investors are not interested in your business idea or product, they are interested in profit.
They will ask you one thing, what’s in it for them.
An accountant can prepare budget reports and forecasted income report for interested investors. These reports show them how the money will be used and how quickly it can be repaid.
If you are interested in raising funds for your startup, hire an accountant.
- Prepare for audit
Yes, accountants help businesses prepare for the audit.
Not having an accountant can put your business in trouble. Even a slight mistake in financial reporting (unintentional) will influence all the reports and this is suicidal for two main reasons.
First, it will show incorrect reports and accounts.
Second, in the case of an audit, you might be fined for misreporting information and accounts.
Your accountant will follow all the standards and laws to prepare financial reports for your business. Just in case if an audit is necessary, you have to do nothing. Your accountant will handle it.
- Business growth
Accountants are exceptionally helpful in identifying growth areas by analyzing cash flows, pricing strategies, and inventory.
For example, if your business needs cash in hand for setting up a new business unit, your accountant can come up with a business financing plan or maybe he can help you get rid of old stock that is of not much use.
Business growth is impossible without guidance and advice from a finance expert. An accountant is the best financial expert.
An accountant is sure to help your new business grow. Not just in its early days but he will keep helping your business for the years to come.
Start looking for a skilled accountant to make your business shine.
Leslie writes for Gilmour Co a small business accounting practice, that help businesses with financial planning, tax, and VAT.