Your business needs a financial management hero.
- There are a lot of steps involved in setting up a business.
- An accountant can help you every step of the way, from setting up your business structure to paying taxes and beyond.
If you’re dreaming of starting your own small business in 2023, you’re likely considering everything you’d need to do to set yourself up for success. Ideally, this means writing a solid business plan, considering your start-up costs, maybe applying for a small business credit card, and figuring out whether you’ll need to rent or buy space for your new venture. Among all these questions to answer and facets to consider, here’s one you should really think about: hiring an accountant.
It takes time for a small business to grow and start making real money, so you may be wondering, “Why should I immediately start paying another person besides myself?” Small business accounting involves a lot of steps, and having an accountant in your corner right from the beginning can save you a lot of time, potential headache, and tax liability. Here’s why.
What is an accountant?
Accountants wear a lot of hats. Ultimately, an accountant is a professional who keeps and oversees financial records. “Bookkeeper” is another term you’ve likely heard in connection with small business finances; the terms are sometimes used interchangeably, but they are not the same thing.
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Bookkeepers do some of the same tasks, but typically don’t have the same level of education as an accountant, and are focused more on recording financial transactions, rather than interpreting them. In short, an accountant can be a bookkeeper, but a bookkeeper isn’t necessarily an accountant. Another term you might hear is certified public accountant, or CPA. This is an accountant who has passed a CPA exam and met state licensing requirements.
For the purposes of your small business, this type of professional will help you manage your day-to-day expenses, create documents so you can track your business’ progress and financial health, and oversee tax filing to ensure you are paying the right amount and getting all the deductions you’re owed.
How can an accountant help you from the very beginning?
The reason it pays to get an accountant on board once you’ve decided to start your business is that they can really help you every step of the way. One of the first things you’ll need to decide is how to structure your business. An accountant will know the legal and tax liabilities involved in starting, say, a limited-liability company (LLC) versus an S-corporation, and can help you choose.
An accountant can also set your business finances up for future success by advising you on what accounting software you should purchase. They can ensure your financial procedures are in line with government regulations. Remember, you definitely don’t want to get audited! And they can help you get off on the right foot with business banking, and learning how to keep your personal and business expenses separate.
Laying the right financial groundwork with the help of an accountant can make things a lot easier for you if your business takes off and you find yourself in the happy circumstances of expanding, hiring employees, and more.
Remember, you don’t have to hire a full-time accountant right out of the gate — you can find one to consult with regularly and pay them as a contractor. If you know other small business owners in your area or line of work, ask around and see if any of them can recommend a good accountant. Hiring one will be time and money well spent to get your small business in the best possible shape to grow and succeed.
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