When starting a business, you will undoubtedly need to make tough choices, especially when it comes to how resources are allocated. Before you start seeing a steady flow in revenue, you will find yourself making some sacrifices, especially if you have a tight budget.
Most entrepreneurs endeavor to restrict their operational costs as much as possible. Some limit employment to only the necessary staff. Unfortunately, some business owners assume they do not need an accountant until the business transactions necessitate the need to hire one or they are unsure on how to go about hiring a good one.
Helps to Set the Right Foundation
From the moment you start spending money when setting up your business, you need to have an account of the expenses. If you do not have the records from the get-go, you will forget to file receipts. These expenses contribute significantly to the taxes you file. Failure to document all the costs incurred when setting up the business will give a false image of your company’s profitability.
Involving the accountant during strategy planning and business planning is also a bonus. An accountant will be vital when looking at the financial projections and reports associated with it. One of the reasons many startups fail within the first year is due to unrealistic expectations from poor planning. Every business owner wants to see his business succeed. However, one can easily get disappointed if the financial projections are unrealistic.
Provides Guidance When Registering the Company
When registering your company, you need advice on the best way to do it, especially when looking at your plans for the business. In Singapore, the first step is presenting your proposed company name to the Accounting & Corporate Regulatory Authority (ACRA). If it is accepted, you can now proceed with the registration of the company, either as a Private Limited Company (Pte. Ltd.), Sole Proprietorship, and Limited Liability Partnership (LLP).
Many of the decisions made when registering a company have financial implications. For example, if you have partners, you will need to record share allocation, properly document financial consequences when a partner chooses to leave or when another partner joins. Additionally, it would help to have an accountant handle any issues that arise when dealing with government entities, such as the tax body.
As the business acquires assets, such as vehicles, should they be registered in the company name or the owner’s name? This is critical for companies, especially small ones. If you are taking a loan to set up the business, you need to have an accountant who’ll ensure proper management of the funds. He will also assess the return on investment and monitor the repayment of the credit advanced. An accountant will know from an early stage if you will meet the repayment terms or if you need to renegotiate with the lender before your company’s finances dip into the red.
If you have been running your business without an accountant, you may need to hire one especially if the business has expanded more rapidly than expected. The challenge of being the business owner and company accountant at the same time is that you hardly have time to concentrate on other equally important aspects of the business. If you notice your negligence is becoming too costly, it may be time to delegate some of your responsibilities to a hired accountant at an affordable fee.
An accountant plays a significant role in the formative stages of a business. You may need to hire one if you do not have the necessary skills and industry expertise in the role. The hired accountant will also become an asset to both you and your small business.
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