Minding Your Money: How to Find a Startup Accountant
Ed. Note: We at the Indiepreneur are very excited to have another guest post, this one by Chelsea Lamb. Chelsea wants to share her knowledge with those who have decided to take on entrepreneurship. She co-created businesspop.net to provide insight and advice to those who aspire to succeed in owning a business.
Entrepreneurs and startups are often running on a limited budget, and as such, every single penny of income must be utilized wisely and every expenditure tracked efficiently. While you can certainly do this yourself, it can be a time-consuming task that effectively removes you from the critical operations of getting your business up and running. Employing professional accounting services can help ensure you’re covered in this critical area of money management. The Indiepreneur offers a wealth of resources designed to help you through the initial phases of your venture’s launch.
Startup Accounting Needs
A startup needs professional accounting advice even before the business opens. Accounting isn’t simply about paying bills or cutting checks but of helping with short- and long-term financial projections and financial solvency. A professional accountant will also be an asset at tax time, ensuring you are taking all of the deductions you are entitled to and making sure you aren’t overpaying or underpaying. They can also ease the day-to-day burden of tracking expenses, accounts payable and receivable, and payroll.
The Accountant Investment
While it may feel like using a professional accounting service is an expenditure you don’t need, consider the fact that the more time you spend focused on items that are likely outside your wheelhouse, the less time you have to work on your business objectives. If you handle accounting yourself and make mistakes or overlook key elements, it could put your business in a precarious financial position, possibly even to the point of making your company insolvent. Unanticipated costs, overestimated revenue, and tax issues all have the potential to derail a startup.
Where to Find Help
If your business is big enough, it might be worthwhile to hire an in-house accountant. According to HireHive, for many startups, hiring someone in a consulting or freelance capacity makes the most sense. You can search online job boards or ask around for recommendations. You might also hire an outside firm to handle key areas for you, like budget and tax preparation. When you interview prospects, look for someone with experience handling accounting for a startup and with knowledge of your industry.
The Part You Play
Even with an accountant in place, the financial decisions of your venture are yours to make. While an accountant can review your budget strategy and operating plan and make educated recommendations, Community Toolbox says it’s still incumbent upon you to have an overall financial strategy. This means making an honest assessment of your product or services, the viability of your market, and your anticipated income and expenses. Estimate high on costs and low on revenue, and maintain a line item budget audit on a quarterly basis. This will help ensure you identify potential financial issues before they get out of hand.
Launching Your Operation
In addition to getting your financial management in place prior to startup, you’ll also want to ensure you have the proper business licensing and insurance. If you haven’t already established yourself as a limited liability company or LLC, now’s the time to do it. An LLC can protect you against some types of liability and will help ensure the business name you’re using isn’t already in use by someone else. Just like an accountant, an LLC formation service can help you when it comes time to file state and federal taxes for your business. You’ll find one here.
When you’re running a new venture, the nuts and bolts of money management can be easy to overlook. Having a trained and knowledgeable expert on hand will help ensure your money is being managed appropriately while you go about building your business.
