There are many ways an accountant can help with a startup business. First, if you are considering buying an existing business, an accountant can help by reviewing past business tax returns before you purchase the business.
In some cases, if you buy a business from someone else and there are issues on previous tax filings, you could be responsible for any omissions, inaccuracies, or errors on those tax returns.
By hiring an accountant to review past returns before you buy a business, they can catch problems that were missed by the previous business owner, such as unreported business income and unpaid taxes before it turns into an audit by the Internal Revenue Service (IRS).
Second, when it comes time to file both state and federal taxes, your first year of filing taxes for a new business can be stressful, and an accountant can help.
Once you’ve taken over the reins of a new business, it’s a good idea to consider hiring an accountant for a startup business to avoid complications with a state tax authority and the IRS. This can help your business run a little smoother knowing that there is a professional overlooking your taxes.
If you hire an accountant to keep an eye on your taxes, they can help maximize your deductions in accordance with current laws, rules, and regulations. Hiring an accountant should be considered part of a long-term investment since their services can help prevent tax problems over time.
A CPA (Certified Public Accountant) can do all your tax returns including the filing and paying of sales tax, use tax, payroll tax, and any other types of taxes that you need to file in order to keep your business in good standing with the state and federal authorities.
Third, an accountant can set up your accounting system as well as review existing systems, payroll, and business processes so that they are performing well in accordance with your budget. An accountant can also monitor cash flow and expenses since they are very important for the survival of a new business.
What Should I Look for In An Accountant?
As you start your business, it is important to find an accountant who can handle the financial issues of your start up and help you plan for future growth.
In looking for an accountant, here are some points to consider:
Consider someone who has experience with startups or businesses just like yours.
That person should be able to size up your business quickly and help you create a written business plan that will serve as your blueprint. You can then use this blueprint as a road map to stay on track with where the company is going financially.
Ideally, it’s best to find someone who understands what makes a startup tick, and knows how they start out small but eventually grow into something bigger over time. This knowledge will be very useful in helping startups move forward with their business.
Be sure to do your homework before choosing an accountant.
Look at the company’s website, marketing materials, and reviews if they exist. This will give you an idea of who they are, what services they offer startups, and how knowledgeable or successful they are in the field. Startups are different from traditional businesses and need special accounting attention.
In addition, check with the Better Business Bureau to see if there are any complaints against this company or individual. You should also research online reviews about this company or individual, but keep in mind that anyone can write anything online so take these reviews with a grain of salt.
Hire someone with big picture understanding.
The person you hire as your accountant should be able to understand where your start up fits into the big picture of world market trends and how it can continue to grow over time
A startup accountant has to be capable of thinking on a larger scale than most accountants who serve established businesses only since they need to help startups grow. They should be able to help you understand and plan for better cash flow and how startups can make the most of their financial resources.
When considering an accountant, consider someone who is also willing to serve as a mentor or coach.
This person will be there to advise you on decisions that need to be made regarding start up policies and procedures such as budgeting, forecasting, and planning. They may even come up with their own ideas about your business based on their knowledge of startup success stories in your field so keep an open mind to these possibilities too.
Ask yourself if you feel comfortable with this professional accounting service or startup business coach, accountant, or mentor. If the answer is yes, then go for it.
If the answer is no, start looking again because you need to be able to work closely with this person especially in start up businesses that are still forming their identity. You want someone who can become part of your startup team and help you achieve success both now and in the future.
Be sure to ask questions about fees before signing any agreement.
What does the fee include and what services do they offer startups? Are there consultation fees? Are there hourly fees? If a package for startups is not offered, inquire about startup services and what you get for your money.
The person you hire should be someone who can set up systems that will work for startups.
Accountants can use filing systems and software programs that startups can use to keep track of inventory, parts orders, and bills all in one place. They can also help you with tax preparation and other financial tasks so it is important a CPA uses a software program designed specifically for startups since these businesses have specific needs.
You need a company or individual accountant who has experience working with startups.
Experience counts when it comes to documenting income and business expenses in a way that startups can understand quickly. It is important that startup businesses start off on the right foot financially when they are first getting started. An experienced start up accountant can help you develop a business plan to get your start up moving in the right direction from day one.
The person you choose should be someone who understands start ups especially if yours is an online start up business.
An accountant can help you navigate the intricate details of filing taxes for an online business and understand which expenses can be deducted when it comes to start-up costs.
Do I Need A Lawyer And An Accountant?
Lawyer vs Accountant: What’s The Difference?
Oftentimes business owners often think that just because they are paying for an accountant that all their bases are covered and may not need a business attorney; however, these professionals offer two completely different types of necessary services.
Accountants offer accounting, payroll, and finance-related services to businesses, but they are not allowed to provide legal advice or interpret business laws.
On the other hand, lawyers deal with tax law, business formation, worker’s compensation, and employment law for startups.
An attorney can also represent you in the event of a lawsuit. They also make sure that your business complies with all federal, state, county, and municipal laws as well as make sure you have a sound employment relationship with your employees.