Does Your Startup Need an Accountant (And How to Choose One)?

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When you think about startup essentials, what first comes to mind? Maybe it’s building a successful team? Or maybe it’s doing market research? Heck, for some people it’s writing a business plan before making the first step…

Anyway, in most cases, hiring an accountant is not usually seen as essential for a startup. As a matter of fact, most entrepreneurs nowadays see financial professionals as superfluous for their business.

Some people say that they’ll only contact an accounting firm only when their business starts growing and expanding. When they are first starting, they often feel too small for having an accountant.

However, this is actually a mistake. According to a recent Sage Survey, most successful businessmen surveyed got a Mandurah accountant when their business was still in early stages. In fact, more than 50% of successful entrepreneurs in the United States report doing so during the first few months of their business…

Why Do You Need an Accountant in the Early Stages?

Let’s make things clear from the start – today, most businesses start as sole proprietorships, which means that the owner does everything from financing to marketing on his own. So naturally, most, if not all, of the owners’ energy goes toward acquiring new clients and getting revenue.

And as Brian Hamilton, chairman of Sageworks, explains in this Forbes article, most entrepreneurs nowadays don’t need an accountant from day one. During the first couple of months, you have accounting apps like QuickBooks that allow you to track all of your expenses with ease…

But if you’re the company’s sole employee, you’re going to have a full plate on your hands all the time –in fact, you’re probably going to be busier than you realize at this point. You might soon be searching for Bookkeeping Canada way, if you are located there, to keep ontop of your business’ incoming and outgoings. It’s surprising how quickly you will need a helping hand. And keeping your books in order and up-to-date is really important. If you start to let your books slip, you can have a disaster on your hands in a matter of months…

When you get stuck in a difficult situation, trying to set up an appointment with a possible investor while listening to a client complaining over the phone, the last thing on your mind will be accounting. But that’s just one of many reasons why you need an accountant to keep you on top of your money…

Four Clear Reasons You Need a Financial Professional Early On

Taxes are too much for SMB owners

If you just take a look at a monthly survey conducted by the National Federation of Independent Business, you’ll see right away that taxes constantly rank high on the list of concerns small business owner experience every month… And chances are, your situation won’t be different at all.

Just try to calculate your estimated tax payments and you’ll see just how tricky it is… If you’ve ever done your private taxes one your own, you surely know just how complicated the IRS tax code is. A good accountant will help you file taxes online and provide you with much needed relief.

Investors simply love accountants

If you want to be an entrepreneur, you need to know how to sell your idea to potential investors, right? Naturally, the answer is yes – however – you cannot just walk into an investor’s office with a good idea and expect to get some money. People want to see clear data, growth projections and good figures more than anything…

And if you’re a couple of months, or even a couple of years away from looking for large investors, having a reputable accountant on your team means having a person who’s watched you’re your financials from the inception. Furthermore, every person with a certificate IV in accounting will be able to create a good financial projection and help you prove your company is solvent and well-maintained.

Accountants don’t just file taxes

Although we spent a lot of time talking about taxes in this article, you should know that accountants do more than filling taxes. Sadly, this is something a ton of people fail to realize and usually, it ends up costing them in the long run. An experienced accountant has dealt with dozens, if not hundreds of people in the same position as you, so he’ll have some useful knowledge…

An accountant will probably know what you’re worried about, and will help you navigate through a number of obstacles, such as your city’s rules and regulations for example. You’ll probably be able to ask for some business advice as well, because your accountant can tell you what has worked for some of his most successful clients in the past and what didn’t…

Your business will grow quicker

Last but not least, a good accountant will be able to help you realize when’s the right time to expand your business and stretch your finances without too much risk. While some entrepreneurs rely on their gut feeling when it comes to growing their business operation, you have to be careful and make a calculated decision if you don’t want your business to fail…

According to a 2014 TMS study, poor financial planning is the 2nd leading cause for a business’s decline. So if you want to minimize your risk of failure, you need to have someone watching your back at all times. A reliable accountant will pinpoint when your business picks up and when it’s the right time to start taking extra orders, stocking up and expanding your business significantly…

Final Thoughts: Understanding the Metrics

As your business continues to grow, a number of important metrics becomes more important to track and understand, according to Sageworks. Needless to say, when exactly you should start tracking and measuring these metrics depends on the type and the life stage of your company…

But at the earliest stage – when most young entrepreneurs are still developing their business idea and looking for investors to launch their business – the most critical metric you need to have a complete understanding is sales.

Therefore, while you don’t actually need an accountant before you launch your business, get the first customer or start making serious revenue, you should at least keep in mind that you’ll need one very, very soon. So as soon as you start seeing a profit, you should start thinking about getting an accountant…