As a new business you will probably need to hire an accountant when it is time to prepare your first set of annual accounts and make your first tax return. Hiring an accountant before that would be unthinkable for many startups – accountants, after all, cost money. But there are significant benefits to hiring an accountant in the very early stages of a new business.
- Your business plan, cash flow forecast, and financial planning will be more robust
- The financial structures of your business will be properly set up
- In the medium and long term, you will save money
Here are some reasons why it makes sense to hire an accountant at the start of your new business venture.
A business plan is an essential document in any new business. It helps you get funding but it is also a tool that you should use to get your business off on the right foot.
When writing a business plan you will have to take an overview of your business. This will force you to evaluate your offer and challenge any assumptions you have made. It will also help you predict and plan for the future.
A key part of this is the financial projections you make, and that is where your accountant comes in. An accountant will be able to give you advice and will ensure the figures and calculations you are making are correct. This will give you a firm foundation for the future.
An accountant can also help you decide on the correct structure for your business, and they can help you set it up. This is particularly important if you have a complicated share or ownership structure.
Getting an accountant to help you set up your company structure will save you time, but it will also ensure that it is done right, which reduces the potential of encountering time consuming problems in the future.
The Right Systems In Place
As a new business the priority is usually to get the products right and then start selling. Understandably this often results in businesses relegating systems, procedures and software solutions to support the business to low positions on the to-do list. Before you know it you are six months into trading and your payroll, VAT, invoicing, creditors’ list, or debtors’ list is a bit of a mess.
An accountant will help you choose the right software and implement robust systems and processes so that you trade efficiently from day one. This will save you a huge amount of time and money in the longer term.
Accountants can also help with the biggest challenge facing most new businesses: finances. This includes helping with financial planning and offering advice on everything from sources of funding to cash flow to saving money on tax.
Applying For A Loan Or Overdraft
Following on from the last point, an accountant can also help if you are applying for a bank loan or other sources of funding. They can ensure that the application and supporting financial documentation is accurate, and they can help you with any questions that the lender might have.
Having an accountant on board also shows the lender that you are serious about your business.
When you are starting a new business, decisions come down to cost. When it comes to hiring an accountant, costs have to be considered in terms of time savings and other efficiencies. When you look at it like this, hiring an accountant as early as possible in your business can bring serious benefits.