10 Reasons Startups Need Accountants
If you’re a budding entrepreneur, hiring the services of an accountant mightn’t be too high on your priority list. You might think that an accountant won’t be necessary until you’re much further down the track with your startup business.
But there are plenty of reasons why you should consider hiring an accountant very early on for your startup venture.
1. They can advise you on the best business structure
One of the first decisions you’ll need to make is whether to set up with a sole trader, a partnership, a company, or a trust business structure. There are pros and cons of each, and an accountant will be able to advise you on which business structure is right for your startup.
2. They can help you develop a profitable business model
It’s crucial to develop a profitable business model for your startup, otherwise, your business won’t be sustainable in the long run. In fact, the inability to develop a profitable business model is one of the leading causes of business failure.
Developing a profitable business model is even more important when you consider that more than 60% of small business startups close within the first three years. It doesn’t have to be that way. An accountant can help you to develop a profitable business model right from the start.
3. They have financial skills and expertise that you probably don’t have
If you’re like most entrepreneurs, you probably have plenty of balls in the air and your time is stretched. But it’s important to get on top of your finances from day one. An accountant has the skills and expertise to help you do that. They’ll save you time so that you can focus on all the other things you need to do.
4. They can ensure your tax compliance
Tax planning and budgeting is important for any business, including startups. It’s important to understand that tax minimisation is legal, tax avoidance is not and attracts heavy penalties from the Australian Taxation Office (ATO).
An accountant will ensure your tax compliance and that you claim all your tax-deductible expenses so that you don’t pay any more tax than you need to. They can also help you to prepare and lodge your business activity statements (BAS) so you can meet any GST, pay as you go (PAYG), and any other tax obligations that you may have.
5. They can prepare all your financial statements
Cash flow statements, balance sheets and profit and loss statements are all necessary for business reporting and decision-making purposes. An accountant can take care of preparing them all, leaving you to focus on what you do best.
6. They can help you with an investor pitch
If you’re looking to attract potential investors in your startup, it’s important to understand that they won’t just be interested in whether you have a good idea. They’ll also be interested in your financial figures and projections. That’s where an accountant can come in really handy. They’ll be able to give you accurate financial data and projections for your business.
7. They can help you set up automated financial systems
A good accountant can help you to develop and implement automated accounting and book-keeping systems and software (like Xero) to make keeping track of your startup business’ finances as easy as possible.
8. They can help you with business decision-making
An accountant can also help you to minimise your business risk by advising you on whether it’s a good time to do things like expanding, take on more debt or hire staff for your startup operation. While it might be tempting, it’s important to understand that growing your business too quickly can cause cash flow issues.
9. They can help you to monitor and control your expenses
Keeping on top of expenses is vital for any business, but it’s especially crucial during the startup phase when your revenue stream mightn’t be as regular or as large as you’ll need it to be. An accountant can help you to monitor and control your business expenses, so that you’ll have the cash flow to meet your bills when they’re due.
10. They can help you to financially plan your startup business’ future
There’s an old saying that ‘people don’t plan to fail; they fail to plan’. That saying certainly applies to startup businesses. Accountants can look at the ‘big picture’ to help you plan financially for your business future, so you can concentrate on all of the day-to-day activities necessary to get your startup venture off and running.
How we can help
At Qi Wealth, our experienced, expert team of accountants can help you to get your startup business off the ground and to grow. We’ll take the time to understand your startup so we can provide you with the best possible advice. We develop long-term, trusted relationships with our clients.
Contact us today to find out how we can help you!