When starting a business, you may find yourself googling a lot! Where should you start and what do you have to do first? Most businesses stem from an idea, passion, or solution to a problem. Most business owners are not finance and accounting experts.
One of your questions may be when would you use an accountant, and do you need one for your business? The answer is no, you do not need an accountant, but you will want one. (Much like your morning coffee, you do not need it, but it makes your day a hell of a lot easier!)
When you are starting a business, you have a checklist of items to complete
And sometimes you will want to hire an accountant to help.
Here are (3) key items every business needs to establish and implement for long-term success that an accountant can support.
1. Forming your business plan
When starting a business you may ask “Do I even need a business plan?” YES, please do not just wing it. A business plan will help you establish a clear vision with intentional goals and an action plan, which are key to long term success.
Accountants can set you up for success by helping in the formation of a business plan and run the numbers for you.
Remember, success in business is not something you can wish for and it magically happens (unless you know something we don’t…). You must take the right steps and work with purpose to create success. Bring your vision to life by planning!
2. Choosing the right legal & tax entity when starting your business
It is important to review and establish both your legal entity and tax classification for your entity prior to opening your business.
The most common and misunderstood entity types are LLC (Limited Liability Company) and Sole Proprietorship, but you can also choose from a Corporation, General Partnership, and Limited Partnership.
Choosing the right entity type and tax classification in the beginning of starting your business can potentially save you thousands in taxes. It can also save you the headache and cost of having to make changes down the road.
Accountants and attorneys are the best professionals to seek out related to making these choices. Accountants that specialize in small business should be able to steer you in the right direction based on your individual needs and tax situation.
3. Setting up your businesses accounting and bookkeeping
We believe that accurate financial data is vital to every business no matter the size. You do not want to start your business out on the wrong foot by creating a financial mess when setting up your accounting system.
When tax time comes, you do not want to have to pay a CPA or tax preparer additional money to adjust and correct a years’ worth of accounting transactions. Having an accounting system and accurate books will save you money and tax. Your books should also help you make accurate data driven decisions.
If your business is just getting started, a common accounting software small businesses use is QuickBooks Online. Although, bookkeeping software like QBO may appear to be simple to adopt and use, it can easily be setup and used incorrectly.
We get the ‘do it yourself’ folks. You may be hesitant to hire an accountant because you are scared of the cost, but trust us when we tell you hiring an accountant in the beginning to help you set a strong foundation for your business is much cheaper than starting with a poor foundation and having to hire someone to fix it. Paying an accountant or bookkeeper is an investment in yourself and your business.
You do not need to go out and hire a bookkeeper on the first day your business opens to handle your day to day transactions and manage your books, but you should not attempt to setup your accounting system alone.
Once your business is a bit more established you will want to start considering outsourcing your bookkeeping and accounting to support your businesses growth. After all, as a business owner, time is your most valuable asset. Do you want to spend it working on the accounting of your business?
Steps to take now
- Download our 12 step checklist for starting a business by filling out our form.
- You should contact your tax preparer or accountant to see if they are QuickBooks Pro-Advisor certified and if they offer training, periodic accounting reviews or other services.
- Check out our service offerings recommended for businesses who want to save time, save money, and grow profits!
Stratlign Inc, is an accounting and business advisory firm with a team of Certified QBO Pro-Advisors. With their easy online accounting capability, it allows them to service you from anywhere (as long as you have internet connection of course). Startup and startup strong! Fill out a “Let’s Talk” form to connect today!
