Although there’s plenty of startups that fall apart, are bought out, or merge with an existing company, there are also those that succeed. And make no mistake, success and growth (especially during a pandemic) are good problems to have. However, you don’t want grow rapidly and wind up spreading yourself too thin, nor do you want to hoard your funds while you figure out what to do with them. What you’re left with is the opportunity to grow or risk ruining a good thing. As year over year growth can be hard to keep track of (due to needing a record of receipts, sales slips, and other paperwork), an accountant becomes necessary to maintain records and to be able to know what is hurting or helping profits. This does not mean that the company needs a full time person. The job can be outsourced with a reputable firm and this will allow your company to focus on what they do best.
A good accountant will know how to help a company maintain their records in a way that will allow a clear picture of profits and losses. They will be able to show where a company needs to improve to have better YoY growth potential and where the company is losing money unnecessarily. Records are the way a company stays alive. Government agencies will request them, as well as any investors worth their mettle. While this can be tedious, there are plenty of CPAs who are set up to handle all of it. This will remove the burdens that can get out of hand too quickly.
One of the ways startups can ensure growth is with more funding. To get more funding, you need to make it clear there’s a large growth potential. Especially if your business is innovative or changing the status quo. This is why a good accountant will be able to see where there are issues, what’s laying the groundwork for a future issue, and what types of audiences/customers you should seek to make your business thrive.
Additionally, while it’s not something to “look forward to,” it’s worth noting that having an accountant can be especially helpful if the company undergoes some hard times, layoffs or even needs to file for bankruptcy. Again, fingers crossed this isn’t the case with your startup, but having seasoned accountants can help you understand the legal options available.
A good accountant, even when they are attached via outsourcing, will allow a business the ability to track every aspect of their outgoing and incoming money. There is also the tracking of payments received, pending payments, and expenses to come. These are all valuable to keep a good YoY as the company evolves.