Your finances are the most important aspect of your business, and keeping them in check will help you thrive. However, if you start on the wrong foot, your business will never be able to take off in the first place.
As many as 20% of all small businesses fail within their first year, and one of the main reasons behind this startling statistic is poor financial management.
If you think you can do it alone, you’re sorely mistaken. Hiring an accountant from the start will not only help you survive but also thrive.
They Can Help You Choose the Right Business Structure
Before you even start, you need to choose the right structure for your business. This can be a bit tricky if you’re not familiar with what implications each of the possible structures brings. Whether your business should be a sole proprietorship, limited liability company (LLC), partnership, or something else depends on various legal and tax considerations.
Making the wrong choice can damage your business in the long run. That’s because you might end up paying much more in taxes than you really have to.
An accountant can help you make the right decision. They will ask you about your business operations, expected income, and other details to determine the best course of action for you.
They Can Help You Get All the Tax Benefits
Let’s face it — taxes are difficult, and even if you don’t have an in-house accountant, you should hire one to help you sort out your taxes. When the tax season comes, you’ll spend hours wondering how you can maximize your deductions, but it will be too late.
An accountant will help you with the entire tax ordeal from the start. They can help you register for the right taxes and avoid those you don’t have to pay until you hit a certain revenue threshold.
An experienced professional will get the most of your tax deductions, make sure all your books are in order, and handle the entire process for you. There might be numerous potential deductions you’ll be leaving on the table if there’s no accountant to draw your attention to them.
They Can Help You Get Financing
We all know how important funding is at the beginning stages of any business. You may have all the right ideas, but if you fail to get financing for their execution, you’re doomed. There are numerous financing options for small businesses, ranging from standard loans to finding investors, but it’s not so easy to get them.
A skilled accountant can advise you on the options you should apply for and help you secure them. If you find someone who’s experienced in your field, they will likely have a lot of experience helping others find the right funding.
What’s more, having your books and all the financial records in order will allow you to present yourself as a professional, trustworthy business that others will want to invest in.
They Can Help You Establish a Healthy Cash Flow
Every successful business owner knows that profit is not the mirror of your company — it’s your cash flow. You can’t depend on sporadic payments and an unsteady influx of money. You need to establish a healthy and viable cash flow.
An accountant will help you make use of the process known as cash flow modelling. In other words, they will assess your current financial situation and forecast your future wealth. According to Opes Fidelio, there are numerous benefits to cash flow modelling, including the following:
- It helps you plan your financial future with ease;
- It allows you to make informed decisions;
- It allows you to map out different scenarios;
- It gives you peace of mind.
They Allow You to Avoid Any Surprises
If this is your first time starting a business, you’ll be surprised to learn how many potential pitfalls and penalties you need to avoid. For starters, you need to read all the business blogs and get thoroughly familiar with the law and everything that’s required of you so as not to make mistakes that will cost you dearly.
Not only do you have to think about paying preliminary and other taxes on time, but you also need to comply with all the regulations pertaining to employee contracts, organization, customer and employee protection, health and safety, etc. One mishap can result in hefty fines that could even close your business.
By working with an accountant, you’re sure to avoid any pitfalls as they’ll remind you of your obligations and help you stay in compliance with all the necessary laws and regulations.
They Save You Time and Energy
As a new business owner, you’ll need to invest a lot of your time, energy, and other resources in keeping your finances and books in check. You’ll have to study the law, review your documents over and over to make sure you haven’t made any mistakes.
This kind of effort is not only time-consuming, but it’s also extremely stressful. You’ll have to learn fast so as not to have to learn from your costly mistakes. On top of that, your business will suffer because you’ll be stuck with administration, instead of doing what you’re best at.
By getting an accountant straight away, you can delegate financial management to them and focus on your core business.
They Help You Set Up Your Business for Long-Term Success
Finally, an accountant can offer something extremely important for the survival and growth of your business — foresight. They have worked with other businesses, and they know what it takes to set your organization for long-term success instead of focusing solely on the next step.
One of the biggest mistakes new business owners make is not thinking far enough ahead, i.e., not seeing the big picture. Something might seem like the right financial move at the moment, but it might cost you a lot in the long run.
An average small business lifespan is only four years. If you want to avoid this fate yourself, you should hire an accountant now and work with them on building a sustainable plan for the future.