When you're starting a business, it can be tempting to do everything yourself. However, failing to delegate is one of the biggest mistakes a small-business owner can make. As YFS Magazine reveals, delegating tasks that you don't have expertise in or like doing to someone else allows you to focus your energy on those things you do enjoy doing. This further frees up your time and energy to concentrate on your core business competencies. Accounting is one of the most valuable services you can outsource as an entrepreneur. Employing an accountant like Jeff Badu, CPA, will help you save stress, time, and money. Find out how entrepreneurs benefit from professional accounting services below.
Help determine what business structure best suits your needs
When you're setting up a business, one of the most important decisions you'll make is the structure. The type of entity you establish determines important factors, like future tax and reporting requirements. For small businesses and solopreneurs, a limited liability company is a smart choice. According to ReadWrite, an LLC is easier to establish compared to entities like corporations. Additionally, an LLC provides liability protection. To establish an LLC, you have to complete some paperwork, like registering a unique business name and designating a registered agent. Check your state's requirements for LLC formation before proceeding.
Get help saving on startup costs
Establishing your business as a formal entity also makes it easier to write off startup costs. This is another point that a professional accountant can help you with. As the law firm of Jurado & Farshchian explains, many LLC startup costs are tax-deductible. These might include employee training fees, promotional expenses, and more. Knowing what is and what isn't tax-deductible can be tricky if you aren't an expert. An accountant will ensure you are remaining compliant, decreasing the likelihood of an Internal Revenue Service audit. According to Paladini Law, excessive expenses are one red flag that may lead to an audit.
Learn the basics of financial analysis
As you grow your business, you want to be able to measure its success. An accountant can provide the information you need for data-driven, measurable evidence of how your company is doing. According to Klipfolio, accountants use a number of financial metrics to measure business success, including liquidity, earnings before interest and taxes (EBIT), net cash flow, and gross profit margin. If those terms don't mean much to you, don't stress: An accountant can prepare this documentation and explain how it relates to business performance. You will also need this kind of granular data if you plan to approach lenders or angel investors to get funding for your business. According to VC List, venture capitalists usually request financial projections before investing.
Put in place organized accounting procedures from the beginning
When you're starting your business, you might not have a lot of complex accounting to handle right away. For example, if you're a solopreneur, you don't have to deal with payroll. Nonetheless, it makes sense to hire an accountant to establish orderly accounting processes and organize your paperwork from the start. Why? iEduNote explains that well-organized accounting can help guide business decisions. For example, if you do decide you want to hire employees down the line, do you have the budget for this? Your accountant can help you figure out if you do. As you expand and need to implement more complex procedures — like payroll — your accountant can advise on tools and processes to help.
Jeff Badu is an entrepreneur, wealth multiplier, and licensed Certified Public Accountant (CPA). Through my services, I help other business-owners maximize their success. Contact me today to take your entrepreneurial endeavor to the next level.