Starting a new business is always an exciting time. You anticipate all the ways your business will succeed, and if you start it off right, it will. One of things that many new business owners don’t think about right away is hiring a CPA. They consider marketing, client retention, sales, and even social media. However, they make the mistake of thinking that they only need an accountant come tax time when nothing could be further from the truth. A great CPA will offer many services that can benefit startups from idea to execution.
Set Up Your Business Correctly
An accountant can help you set up your business structure and the finance side of things before you even start making money. They can help you decide what to do with your start-up capital and help ensure you do everything by the books. Nothing is worse than getting started only to realize you needed a different structure. Many businesses start as LLC but may need to be an s-corp or other type of business instead.
Save Hours of Time
Having an accountant on hand can save you a lot of time. When you’re starting a business, time is already a precious resource that you can’t make more of. Most startup ventures have their owners working long hours already. It’s worth the money to invest in an accountant to handle the financial aspects of the business. This time saved means you can focus on the most important tasks for your business instead of all the little things.
Save Tons of Money
A good accountant will cost a pretty penny. But the money you save later on will more than make up the cost of hiring them. Accountants know all the fine details of the tax code to ensure you are getting every deduction and credit you are owed in addition to putting all the income and expenses in the right places. They make sure you don’t owe too much come tax time. Those savings add up and reveal why they are such a valuable resource.
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Gain Insight Into the Financial Health of Your Startup
Not only can an accountant give you a snapshot of your financial health on any given day, they can also create important documents to give to your investors and clients as needed. An income statement simply shows the income and expenses your startup is incurring. A balance sheet will show your business finances on a specific date. And a cash flow statement shows how much liquidity you have in your business. Each of these documents gives you valuable insight into how well your new business is doing.
Help You Set Up a Business Budget
Not sure how to decide where all the money should go when it comes in? A CPA can assist you in creating your very first business budget. Since they are well-versed in all things applying to finances, they can easily help you create a working budget. This is one of the many pitfalls startups make. They don’t create or follow a budget. While the marketing for accounting firms might say they do it all, it’s important to find out if they really do. You want one who can manage all your finances in one place to simplify the process for you. It’s more difficult to hire a bookkeeper who works for a different firm than your accountant. Make sure you ask about all the different things they can do for your startup.
Avoid Expensive Mistakes
No one wants to end up owing too much in taxes. And no one wants to owe interest on tax they forgot to pay because they made a big mistake. Hiring a CPA helps to mitigate costly mistakes. When you use a professional accountant, you’ll be better prepared throughout the year to file the different taxes that the government requires. Additionally, you’ll be better prepared to avoid costly mistakes. You don’t know what you don’t know, but at the end of the day when it comes to taxes you are still responsible for it.
CPAs Help You Comply
Complying with industry regulations is about more than saving you money. It can also keep you out of jail. Tax fraud, tax evasion and other tax compliance issues are one of the reasons many businesses go under. Hiring a CPA helps you comply with all the regulations so your startup can get up and thrive.
