Why Every Start Up Business Needs an Accountant, Not an Accounting Software

Why Every Start Up Business Needs an Accountant, Not an Accounting Software

The aim of every start up business is to make money, and as much of it as possible. Managing that money though is no easy task. That is why finding a great accountant, right from the day you start your business, whatever it is, is so very important.

Some start up business owners fail to see why they need to bother hiring an accountant when softwares like Quickbooks and Peachtree exist and seem like they are relatively easy to learn. The problem is though that accounting software has no part in helping you business grow, which is just what a good accountant can do.

Here are some of the things an accountant or bookkeeper can do for your start up business that may make all the difference:

• In the beginning they can help you decide what type of entity (such as S-Corp or LLC) and ownership structure is the right one to have in place when you first get started;

• Design and set up your accounting system so that year-end financial reporting will be easier.

• Ensure that you pay the correct types of taxes in the correct amounts at the correct time.

• Ensure that you send out all the right W2 and 1099 forms to the proper people at the proper times, and also make sure that if you send out 1099s, the IRS will agree with you that those individuals are independent contractors and not employees. This is a common mistake that start up business owners make because the IRS rules are rather unclear to the layman but it can cost you a lot of money and stress.

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• Advise you on the proper, legal deductions and how to best separate your personal and business expenses.

• Advise and guide you through an audit if you should ever have one.

• Advise you on specific transactions. For instance, whether it’s better to lease or buy office space and equipment.

• Compile your financial records for the past period.

• Help you understand your own financial statements. You should utilize your accountant’s expertise to help you analyze your financial statements so you can understand what he or she is telling you. If you neglect to do this, you won’t know as much as you should about how your company is doing.

As you can see, an accounting software won’t provide you with much of any of this, so finding a good accountant or bookkeeper is the best path to take.

Affording an accountant or bookkeeper is another issue that start up business owners worry about. A reputable online based service can be one answer. A number of experienced accountants have embraced the digital age completely and are servicing their clients primarily via the Internet.

The same personal level of service is still there but thanks to the power of the internet you can be a hundred miles away from your accountant and he or she can still keep you updated on every aspect of the financial wellbeing of your start up business.