Launching your own business from scratch is a challenging and monumental time. There is enough stress on your plate without you having to worry about your cash flows and costs. Accounting is a critical part of any business, especially in its preliminary stages.
You may be a superstar, but there is a limit to which you can stretch yourself and utilise your energies. If you feel accounting is not your forte and will only take more of your precious time, then you may want to consider hiring an accountant to ease your accounting processes.
No matter what the scope of your business operations are, there are professional accountants available to help you out. However, if you are completely new to this, and need a bit of guidance, then you are in the right place.
What does an accountant do?
Accountants are masters of the art of accounting and offer a diverse, wide portfolio of services to their clients. These include but are not limited to:
a. Deciding whether registration for VAT is required or not
b. Helping you decide which software to procure and how to set it up, including defining variables
c. Deciding whether registration for VAT is required or not
d. Helping you choose which business category you should officially be registered in by assessing and analysing your business situation: partnership, sole tradership, or limited company. This decision will impact your tax requirements and personal liability equation. Hence, it is critical you make the right choice in this matter.
Once you are up and running, an accountant can benefit you in a lot more ways:
a. Give ideas and advise on how to onboard employees’ payroll
b. Make sure that you utilise all the possible tax relief conditions that your business qualifies for
c. Provide guidance on how to reduce tax liabilities in the future
d. Manage and optimise your company’s cash flows
e. Assist or lead in preparing fiscal forecasts and relevant business plans
f. Identify the right kind of finance to be raised and in help in doing just that
g. Ensure that tax returns are filed within deadlines and that the right amount of tax is paid
When is the right time to hire an accountant?
It is never too early to start consulting an accountant. From the moment your business idea is born in your mind and you begin to formulate a plan, schedule a preliminary appointment with an accountant. He can guide you and help you develop an accurate, realistic business plan with appropriate financial forecasts. Not only that, he will be able to direct you in the class of finance that would best suit your needs. Your accountant will be able to inform you of any legal and regulatory requirements that you would have to meet as well as a start up business. He will provide a complete end to end roadmap that will tell you whom to inform, where to file your business papers, deadlines and a lot more. It will make your work a lot easier and allow you to concentrate on building your business, instead of worrying about bureaucratic and administrative issues.
As stated, your accountant will instruct you which business category to fall under: limited liability, partnership or sole trader. Remember this will impact every dimension of your business operations and change the scope according to the business format you decide to go for. This can include any intellectual property rights you want to patent, your letterheads, paperwork etc.
What do you need to know before hiring an accountant for your start-up?
it is always better to compare oranges with oranges and not compare with apples. What do we mean? Seek out accounting firms that are the same scale and size as your business as they are the ones who will best understand your issues and custom needs. Not just that, perhaps you want an accountant who has experience and expertise in your field of business. Of course, that will make a positive difference and probably make you feel more comfortable with him as well. Do assess their reputation in the market as well and check which accounting body they’re a member off. Credibility is everything!
Take your time and touch base with four to six accounting firms that appeal to you. Fix meetings with them and request proposals. Ask them why you should hire them and how they can help your business. Spend some time on this as this is going to be a long term business relationship. Always ask before your first meeting if there are any prerequisite charges or the introductory meeting is free. If you ask for serious advice on a specific matter, you may just get charged.
Give the accounting firm you are meeting an overview of your business and what your expectations are from your hired accountant. See if their portfolio of services can cater to your demand. Can they offer any improvements?
If you already have a business plan, get them to review it and share comments. However, if you are looking for ways to raise capital finance, tell them you need a fiscal forecast. Clarify from before what the cost would be and if you can afford it. Check when they expect their fees to be paid and how frequently.
After the Meeting
Suppose you have found an accounting firm you love and you have hired it – you will a contractual letter from them that will outline their working terms and conditions. Once you have signed the paperwork and have made things official, clarify to your accountant that you need his services on a frequent basis, not only at the end of the tax year when fees are due. Tell him he can talk to you and disclose if there are any alarming discrepancies that he identifies in your financial statements as you want to be protected and not find out issues at the last moment.
Develop Your Relationship
Utilise your accountant as much as you need and get advise on how to expand or improve your start-up business. There is no harm in doing this! Just do a yearly review of your accountant’s services and make sure his capability is what you need.