Depending on where you grew up, you may’ve heard the phrase, “pull yourself up by the bootstraps.” In the startup world, bootstrapping is the common practice that entrepreneurs dedicate themselves to — sometimes to a fault. They do as much as they can with to avoid as much cost as possible. While there’s a desire to cut costs as much as possible to build a sustainable company, accounting is one area you’ll save money on outsourcing.
From day one it is important that you know exactly how your money is being spent, where it’s being spent and how much is being spent and quite frankly if you’re bootstrapping everything else in your business you may not have time to keep your eyes on this sort of thing. Below we share just a few reasons why your startup needs to hire an accountant.
As with anything else, the sooner you begin practicing financial management, the better off you will be when you have a ton of money to manage. As startups, it’s important that you learn how to handle your finances early. We see so many startups fail or wound up in legal trouble simply because they mismanaged their money poorly in the early days of their business and it continued as their business grew. Do not buy into the misconception that you should only hire an accountant when you have a certain amount of money in the bank.
When most people think about finances they automatically go into a place of negative thinking. While finances are not always the most glamorous thing to talk about, outsourcing your accounting will save you a lot of time. Think about how much time you probably spend going to the bank to cash, deposit and withdrawal money from your account simply because you have to do other things first such as see how much money is already there. Additionally, consider how much money you spend on invoicing each month. If you hate dealing with finances, outsourcing them will lift a huge burden for you.
Helps Your Business Grow
One of the many reasons why small business growth is often stifled is because startup founders tend to focus so heavily on areas in which they don’t perform well that they lose sight of the areas in which they thrive in. If you really want to see your business go to the next level, consider outsourcing an area, such as accounting, in order to give yourself the opportunity to focus on the areas in which you are comfortable.
Your Business May Require an Audit
Every small business has nightmares about the possibility of having their business audited and in many ways that nightmare is valid. While not all small business are required to conduct audits but if you don’t speak with an accountant first you may not find out that your business has to do an audit until it’s too late. By hiring and account you are ensuring your records are not only compliant but that they are being properly regulated.
Your Budget May Be Falling Short
A recent study conducted by the Bureau of Labor Statistics stated that about half of all businesses will fail after five years of opening. While there may be many various reasons as to why a company may fail, it can mostly be attributed to not having an accountant around to help you analyze your budget, catch errors or even accurately capture financials.