Why Your Startup Needs To Think About Its Accounting – Now!

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Why Your Startup Needs To Think About Its Accounting – Now!

For many startup companies, accountants are viewed as an extra expense that is not necessary until the company has grown to a certain level. But for small companies that take up the task of handling their own taxes, the end result may be an even greater cost than just hiring an accountant from the beginning. For those companies that are straddling the fence about using an accounting service to handle their books, it is necessary to know how inexperience and misinformation can impact the potential success of your fledgling business. Of course, newer companies have limited finds and have to constantly look for ways to maximize growth while keeping overhead low. However, no matter how well you are able to manage your company’s finances, investors prefer accountants that can provide them with detailed growth projections, figures, and hard data in order to evaluate a pitch. Quite simply? Accountants enable startups to experience quicker growth by showing investors that you are serious about your business.

In the beginning, it probably is not necessary to hire an account full-time. The best way to manage in the beginning is by outsourcing the accounting services which enables you to pay only for the exact accounting support your startup needs. A main concern for startups is exactly when an accountant should be hired to handle their finances. While some companies may want to use one from the earliest stages, others may opt to wait a few quarters. There is no exact answer for when to bring in an accountant but in general one should be acquired once expenses are increasing significantly and funding has reached a certain level. Once your startup increases expenses to hire and track employees, the need for greater financial reporting becomes a primary concern as you learn how to navigate cash flow.

There are great benefits to having an accountant on hand for startups that are often overlooked. Using an accounting service provides your business with support in several areas, but the most important of which is allowing you and your team of employees more time to focus on developing products and relationships, and fine-tuning sales and marketing campaigns. When your business is first established, it is necessary to learn which areas of business are essential and which are non-essential, in order to optimize potential growth.

An accounting service can provide your startup with financial information of the highest caliber, which makes it easier for you to woo potential investors. Having your financial statements in order is not only important for tax reporting, but also keeps your investors aware of any upcoming news within the company. Furthermore, the financial information that is provided by your accountant will give greater insight into the trajectory of your company and enable you to develop the most effective business strategies.

Another great advantage to an accountant service is having another valued business partner on your side. Because accountants usually have years of experience assisting startups, they can provide a wealth of information for raising funds, structuring deals, financial planning, negotiating terms, financial reporting, and much more.

Essentially, if you believe that your startup may need the assistance of an accountant, then time is of the essence to begin finding one that fits your needs. The earlier you acquire one, the easier it will be to fix any financial entanglements that occur in the future. It is always beneficial to have a firm financial system in place as this will serve as a strong base for your business and support its overall health. Research has shown that startups that begin with erratic financial planning often end in demise, making the assistance of an account all the more invaluable for a new business.

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