The reality is 90% of startups fail. And it’s not because the entrepreneurs running these startups lack vision. Most of them aimed to solve big problems and make people’s lives easier.
It’s along the way that they make mistakes such as focusing on the wrong things or trying to do everything by themselves. The last one, in particular, is something a lot of entrepreneurs can relate to.
It’s natural for business owners to don as many hats as they can, right? But accounting work? Here, we’ll talk about why hiring accountants are essential for building a strong foundation for your startup.
Hiring Accountants: Benefits of Doing It from the Get-Go
We talked about the services accounting firms offer for businesses in a previous post. Here, we mentioned how the business advice accounting firms give can help you improve your business based on your current financial standing.
Now, some startups prefer to do this business consulting when they’re at the scaling stage. But there are benefits to doing it early on. If you don’t have a degree in accounting, for example, you can hire an accountant to help set up your accounting system.
You can also hire accountants at this stage, so you don’t have to worry about payroll as soon as you hire your first employee. It also benefits your startup if you consult with an accountant early on to help prepare the necessary documents for tax filing.
Partnering with an Accountant: When You Should Do It
During the early stages, you can get by with hiring a bookkeeper to handle your financial transactions. But at some point, you can no longer put off hiring an accountant.
And that point usually comes when you’ve raised an initial round of funding. Remember, it’s not just your money anymore. You don’t want to make mistakes when handling investment dollars because you want to cut costs.
Another way to tell when to hire an accountant is if your expenses are getting harder to track. This often happens when your business starts to grow.
Now, some entrepreneurs will outsource their accounting needs to an accounting firm or hire an accountant in-house. There’s another option you should consider – using services offered by companies like PROfiltr. They don’t do any accounting themselves but help connect startups with their network of highly qualified accountants.
Help Your Startup Do Well: Hire an Accountant at the Right Time
Not all startups have the same accounting needs. Some entrepreneurs who want to be extra sure about their financials will think about hiring accountants from the get-go. Others though will make do with a bookkeeper for a time and then hire an accountant as soon as they receive their first funding.
What’s important is that you realize that you will have to hire an accountant at some point. You can’t grow your company if your focus is split between your core business and your accounting responsibilities. Delegate accounting duties as soon as it gets too much for you so you can avoid making costly mistakes.
For more business advice, don’t forget to check out our blog.