10 Reasons Why Start-Up Should Hire an Accountant
Updated: Aug 3, 2020
1.START-UP NEEDS YOU.
Keep your focus on core business needs. A startup needs the attention of its founder, including his or her attention to growing the idea into a viable product or service. That means that, as a founder, your time should be devoted to strategy, marketing, funding and other key areas that require your focus over the daily operational tasks of a business.
As an entrepreneur, your focus should be on running your business. Investing in a professional accountant and engaging him or her as an ongoing tactical business advisor will assist you in maintaining that focus and simultaneously keep you on the road toward your business goals.
2. MANAGES YOUR ACCOUNTS
Not many founders have backgrounds in finance or even a working knowledge of accounts payable, accounts receivable and taxes. It’s better that a professional who took courses and was certified in these areas handle those aspects of the business.
3. CONSULTANCY ON REAL-TIME
As a founder you would require to make various decision, say big office purchase, hiring more employees or applying for loan those decisions would have potential consequences and implications of making. Having an accountant as your financial advisor to help you with budgeting, Tax implication and monitoring cash flow on a steady basis will allow you to navigate any hurdles that occur in real time.
You should take a collaborative approach with your accountant, allowing you to make decisions together based on the latest data and also take advantage of a consultative relationship that will help you make business decisions when you need to make them.
4. IN ATTEMPT TO SAVE PENNY YOU MANY END UP LOSING POUND
Most entrepreneurs think that a tight budget means they won’t be able to afford hiring an accountant. But if you think about how much time and effort you spend on trying to manage your finances yourself (not to mention the possible errors you could incur during reporting, and related losses from poor financial decisions), the benefits certainly outweigh the cost.
For example In Income tax laws one can minimize their tax by making specified investment but most business owners frantically miss out the same during the year and by the end of the year it is too late to make an impact on that.
5.DIFFERENT PERSPECTIVE ON THE BUSINESS.
Although you may believe you have a good idea about the state of your startup, accountant helps to have another pair of eyes on this.
Your accountant can put the financials in order and run reports showing how you are doing each month, where the funds are going and how your efforts are paying off (or might need improving upon). He or she will give you the different through the numbers being crunched.
6. COMPLYING WITH TAX LAWS
In India Tax laws are very tricky. There are 2 sets of Taxes Direct Taxes and Indirect Taxes with multiple sections provisions , notifications and various due dates chances are likely that you may miss out some or interpret law erroneously consequence of the same may be harsh, Thus consulting a chartered accountant may alleviate the same
7. MANAGING YOUR FINANCES AND WORKING CAPITAL
There are various covenant attached when you avail loan say submission of financials, stock statement, various certificate, Accountant would make sure timely preparation of the same
Also you may delay filing your GST return, which would result in your customer may not release your payment , thereby distorting your working capital cycle. Because you are so busy, you may not realize that there are outstanding payments from your client base. Any late payments here could infringe upon the cash flow you need to keep your startup humming along.
With a Accountant working with you, he or she can stay on top of this and send out reminders to make sure your cash flow remains optimal. This will also look good when it’s time to seek another round of funding because you can show positive cash flow you might not have been able to show without that assistance.
8. AVAILING BENEFITS FROM GOVERNMENT SCHEMES
In Recent years Government has been giving assistance to various start-up, MSME in form of subsidy, loan without collateral , loan at reduced rate . As a founder you would not be aware of those schemes and about its procedure to avail .An accountant would bridge you towards the scheme and would help you to avail benefits of the same.
9. YOUR FINANCIAL HEALTH WILL IMPROVE
If you’re not laser-focused on your finances, they may get away from you. Working with an accountant will help you tune into unnecessary expenses, figure out where you’re losing money and strategize for growth. Your accountant can help you with financial forecasts that aid you. He or she can also advise you on whether taking out a business loan is a good idea or not.
Whether you hire an accountant on a regular monthly basis, check in with one a few times a year, or just during tax season. Believe me, you’ll be glad you did. The investment will more than pay for itself and will help you build your business
10. PREPARING FOR FUTURE
Finally, one of the biggest benefits of hiring an accountant is getting advice on how to plan for the future. Together, you can pull reports from past months and examine the seasonality of your business.
As a business owner, you are most often preoccupied with the day-to-day operations of running your business. However, an accountant can take a step back and objectively look at the big picture to find the best way to support the longevity of your business.
The life of a business owner can be isolating, especially when you’re left with a pile of receipts and invoices to plow through at the end of the month or the year. It doesn’t have to be that way. As the saying goes, “Many hands make light work,” and partnering with an accountant who has the skill and expertise to guide you through your journey will set you up for lasting success.