When should a startup business hire an accountant?
If there’s one thing I’ve learnt in business, it’s to delegate where possible. I guess in many ways, if I didn’t believe that you should be comfortable delegating work, projects or small tasks, I wouldn’t have set up an outsourced accounting business.
However, when you’re setting up a business, there is a real tendency to try to keep everything in-house. This could be for one or all of the reasons below:
- A desire to control everything
- Unsure who or which company to approach
- To try and keep costs down
All are entirely valid reasons for not hiring an accountant. However, what we often find is business owners making the decision to get an accountant involved only when their accounting has become unmanageable or when there is a problem.
As you can imagine, it’s the wrong approach. It’s like knowing there is a problem with your car but only wanting to fix it when it’s actually broken down and stuck in the hard shoulder of the M1.
The truth is you should look delegate your company finances to an accountant straight away, as soon as you’ve decided that you’re going to set up a business and be your own boss. Here are 5 reasons why.
You can get free advice from an accountant from day one
There’s a natural assumption that when you step into an accountant’s office you start paying as soon as you walk through the door. However, that’s really not the case. You’ll only pay for the work that is completed and it’s a really good opportunity to get a more senior view on your business.
Getting an accountant onboard from the start can really help to inform the business’ potential direction. They can offer realistic projections within your company’s business plan that could be really beneficial if you’re looking for investment.
It’s most likely to be cheaper to hire an accountant
If there’s a fear that you’re going to have to pay through the nose for the services of an accountant, what’s the equivalent expense to your business if you carry out accounting tasks yourself?
For example, if you charge your time at £50 per hour and it takes you a few hours to do your bookkeeping, the cost to your business is way over what you would typically expect to pay an accountant. Furthermore, to resolve any issues with your finances if they’ve been done incorrectly can be a very expensive mistake.
Get advice on your company’s legal structure
Some businesses register as a limited company, other business owners decide to register either as a limited partnership or as a sole trader. Each company structure has its own merits and disadvantages which an accountant will happily explain and help you to choose the best option for your business.
For example, there are some tax benefits to being set up as a sole trader. However, should your business go under or fail to pay a supplier, you are personally liable. Whereas setting up a limited company, it is the business that is responsible for any business related obligations, not you personally.
Cloud technology allows business owners and accountants to work much more collaboratively
Cloud accounting software such as Xero and Quickbooks allows business owners to get a more transparent overview of their financial position when working alongside an accountant. Accounts can be accessed in real-time and with all data in the cloud, security is top-notch.
From outsourced accounting and bookkeeping to payroll, all your accounting requirements can be delivered on a single platform for a simpler and more efficient way of working.
Use an accountant to understand the risk of taking on a franchise
Owning a franchise shares the same challenges and as much risk as starting up your own business. Although you should be supported by a proven concept, strong brand and solid systems, many franchisees fail each year.
If you’re new to business, an accountant will be able to put into perspective the risks with taking on a franchise as well as the returns you should expect to make following your investment. Having this insight at the start is integral to making an informed decision on whether taking on a particular franchise is a risk worth taking.
Conclusion: an accountant should make business life easier
Being able to determine everything surrounding your business from its marketing and finances, to deciding when to have time off at the drop of hat, is extremely liberating. However, doing everything once the business starts to grow is impossible and usually to the detriment of both growing the business quickly and your own health. It will be only a matter of time before you start to feel overworked and overly stressed.
It’s inevitable that you will need an accountant at some point. In order to give your business the best possible start, get expert accounting advice from the beginning.