Getting your startup off the ground and turning it into a profitable venture will require every bit of your ingenuity and hard work to continue providing your customers with products that meet their needs.
You will also need to keep close tabs on your cash inflows and outflows to ensure you’re not spending more than you’re making. It is equally important that you’re up to date with your business’s local and federal tax requirements.
Common Challenges for Startups
As a startup owner, you will have many activities and decisions demanding your attention. You might be tempted to put getting your books in order on the back burner, especially if it means bringing in professional help. However, many who give in to this temptation regret it down the line as they scramble to meet tax deadlines or get the required documentation for a loan.
When you hire an accountant to help your startup, you gain a fully qualified professional to take care of the numbers as you focus on satisfying your customers. There are several ways a certified public accountant can help you streamline your operations and avoid a last-minute rush:
The key to any business’s success is planning, and one of the critical components of any short or long-term business plan is the budget. A business budget will help you locate areas where you’re spending more than you should and areas where you can begin to make savings.
You could be making great sales from your current location, but the high cost of rent could eat up any potential profits the location promises. Or, you could be holding on to more staff than your income level justifies. Professional accountants can reveal such problems, helping you make the decisions better suited for your business.
Difficulty Securing Loans
As a budding entrepreneur, you probably won’t have all the finances you need to get to the production level you want. Or you may have a big order you don’t presently don’t have the resources to satisfy. At this point, you will want to source funds from banks or other financial institutions.
Your accountant will help you assess all the funding options you have. You might not even need to approach your bank for a high-interest facility. If your bookkeeper determines that a bank loan is your best bet, they will help you put your request together in a way that boosts your chances of approval.
As part of putting together your application, your accountant will know how much you need to request based on your business needs. They will also help you work out potential repayments and how you can manage to keep up with them every month.
There are a number of intricacies involved in payroll calculations. Statutory deductions and payroll tax should be accurately worked out and subtracted before sending your employees their paychecks. As an entrepreneur focused on growing your business, you may not have enough time to wrestle with a spreadsheet until you get the right figures for each worker.
An accountant will not only help you get the payroll done every month, but they will also help you establish a system to ease the process and make it error-free. With this system in place, you won’t struggle to keep up with your payroll as the company grows and more employees come on board.
As you open your doors to customers, you also want your startup to begin on the right foot with the IRS. A good CPA will help you to get into the habit of making quarterly estimated tax payments. This will help you avoid giving yourself a steep mountain to climb if you wait until tax season.
An accountant can also be of service to your young business by helping you discover ways you can benefit from various forms of tax relief. As they prepare your annual returns, they may make you aware of tax refunds you should receive.
Finding a Quality Accountant
Now that you’ve established how useful a qualified CPA can be to your startup, the next question is, how do you find one? There are some key attributes you should look for in a professional accountant before you take them on board.
First and foremost, you need to hire a trustworthy individual. It is this quality that will compel him or her to keep your information private. Your chosen accountant should also have a strong ethical backbone. This way, you can be sure they won’t engage in any kind of malpractice that can land you in trouble with the IRS. Lastly, you need to be sure you’re dealing with a fully qualified, experienced professional.
Strongly Consider Outsourcing
Acquiring the services of an experienced CPA is not cheap. You will need to part with thousands of dollars every month plus a raft of benefits to have an in-house accountant at your beck and call. Thankfully, you don’t have to hire a full-time CPA; you can simply outsource the role so that you only have the accountant when you need them. The investment is often worth it in the long run