- Mistakes This Entrepreneur Made With Her Startup’s Finances (and How to Learn From Them) - March 26, 2020
- 8 Tips for Writing Amazing Product Descriptions - February 24, 2020
- Ready to Launch a Business? Here’s Your 12-Month Plan to Making it a Success - January 29, 2020
If you’re just starting out with your business, it’s understandable that you’d want to do as much of the work yourself as possible, rather than spending any of your hard-earned revenue on help. I was the same way when I launched my marketing firm in 2006. But since then, I’ve come to realize one valuable lesson: It is 100 percent worth it to invest in hiring people for tasks you’re not great at or don’t have the time to complete yourself.
One of the very best investments I ever made was hiring an accountant to help me with my taxes several years ago. Yes, it cuts into my profits, but it’s worth the expense to remove this headache from my to-do list.
Here’s why you should consider hiring an accountant for your own startup:
You are not an accountant
Unless you are a CPA, you are probably not an expert at accounting. And even if balancing your books is a secret passion of yours, you have other areas of your business that need your attention more. You may be perfectly capable of logging into your accounting software and categorizing expenses, sending invoices and viewing your profits and loss statement. But just because you can doesn’t mean you should.
Consider how much time these tasks take you each month. Even if it’s only an hour of your time, that’s an hour you could be working on building your business.
You’ll start off on the right foot
It can be helpful to hire an accountant to get you started properly right out of the gates. When you’re first launching your business, an accountant can advise you on the best business structure, help you set up a business bank account, and set up your accounting software. Then when it comes time to hire employees, he or she can also help get them set up on your payroll, whether your account manages the task or you take it on yourself.
Tax laws are tricky
Unless you enjoy reading about tax codes for fun, you probably aren’t up to date on the latest tax laws. However, an accountant is. Tax laws can work in your favor, or against you, depending on your situation. An accountant can help you strategize throughout the year so that you make the most of your deductions and expenses when tax season rolls around.
DIY ups your chance of being audited
The last thing you want to do is get audited. But, for example, simply being unaware of the fact that checking work email on your couch once a week does not qualify you for a home office deduction, might put you at risk of an audit. DIY tax software is great sometimes, but an accountant has an expert eye that will catch mis-categorized expenses before the IRS raises an eyebrow at them.
Which brings us to…
You can owe less in taxes come April
The biggest boon for me in hiring an accountant is that he looks at the health of my finances during the year and makes suggestions that will minimize how much I pay in taxes when he files in April. He might suggest that I take more out through my payroll taxes throughout the year, so I’m paying a little each month rather than thousands during tax season. This reduces the strain of my finances in April, which I appreciate!
An accountant can help handle financial-related tasks
With so much else to take care of in starting and growing your business, you really don’t have time to chase after clients who haven’t paid you. If you retain an accountant for specific services each month, she can take on that daunting task for you. Your accountant can also take over paying bills, managing payroll and helping you keep tabs on sales reports and forecasts.
Your financial health will improve
If you’re not laser-focused on your finances, they may get away from you. Working with an accountant will help you tune into unnecessary expenses (you can probably get a better deal on that mobile plan, for example), figure out where you’re losing money and strategize for growth. Your accountant can help you with financial forecasts that aid you in determining whether or not you can afford to expand your office space or hire more help. He or she can also advise you on whether taking out a business loan is a good idea or not.
Whether you hire an accountant on a regular monthly basis, check in with one a few times a year, or just during tax season. Believe me, you’ll be glad you did. The investment will more than pay for itself and will help you build your business faster.