What are the benefit of hiring an accountant when you start a business and how he/she can help you tremendously not only in the startup but also in future business growth.
Many small business startups think that only bigger businesses need the services of an accountant. This could not be further away from the truth. If you are a small business start up, it could be true that you need less services from an accountant but nevertheless, because you are likely to be starting with a limited budget when you start a small business, an accountant can be of interest was able help in keeping an eye on the cost of the startup and controlling your finances.
If you are starting a business for the 1st time, an accountant can help you understand the various costs as well as help you get an estimate before you begin. This helps you in getting the required funds and capital ready beforehand rather than finding yourself short of the required amount of money at a crucial business juncture.
Even after the business has started up, this time is likely to be a very busy time for you. Many business owners do not have an accurate idea of how much money they are actually making. It is extremely important to know how your product is doing and how much money your business this making in terms of profit to know whether you have got certain things like such as the amount of cash flow, funding, capital investment and the pricing of your product as well as the profit margin. An accountant can help you clearly see this picture.
Another point to consider is that people starting off with a small business think that they can do the accounting job themselves using the accounting software. There are several excellent accounting software available in the market which are easy to use. However, one must understand that an accounting software only does what you tell it to do. An accounting software cannot be a replacement for the expertise and knowledge of a good accountant.
The services of an accountant go beyond just crunching numbers. Most of the accountants today, specially those working for business startups work in the capacity of financial advisory as well. The accountant has an intimate knowledge of how profit and loss, costings and business financing work. If you involve an accountant in your business right from the beginning, he will understand your financial goals better and have a know-how of helping you move onto the next step. An accountant can not only help you manage your business goals but also keep in mind your personal financial agenda as well.
It would be wrong to think of an accountant for business as mainly someone who prepares your tax return.
Accountants have a wide knowledge of finance and are an invaluable asset to the business. These are some of the areas of expertise in which an accountant can help your business.
- Business advisory services.
- Accounting and record keeping.
- Tax advice.
If the accountant is closely involved with the business these areas of functioning overlap with each other. For example when the accountant is preparing your profit and loss statement, he can also advise you on increasing or decreasing a profit margin and taking a better control of your overhead costs. He can pinpoint certain costs that are inflating the cost of running a business and hence reducing your profit margin. When filing your tax returns he can also make suggestions regarding investments and business realities to reduce your year-end tax liability.