Did you know the IRS charges 5% of unpaid taxes for every month you don’t pay them? If you want to keep up with that and other business financial matters, consider using tax services.
A good accountant can save you time and even money. That way, you can focus on growing your startup to increase profits and see more success.
Read on to learn the benefits of hiring a business accountant.
1. Prepare for Taxes
One of the best advantages of tax services for your startup is to prepare for taxes. When you’re new to running a business, you might not know how much money to save for taxes.
If you simply start working for yourself, you’ll have to pay quarterly estimated income tax. Businesses that hire employees have to withhold taxes for those workers and pay for things like unemployment.
An accountant can help find deductions and other things to help lower your tax bill. They can also help you pay those taxes online or with a check through the mail.
Finally, your accountant can do your business tax return at the end of the year. If you have any issues, an accountant can help with tax resolution.
2. Manage Cash Flow
As you get your startup business going, accounting services can help manage the business’s money. Your accountant can go over how much money you need to stay in business.
They can also help you determine how to generate more income. An accountant can manage any bills you need to pay to employees or vendors so that you don’t get behind on payments.
Over time, they can track what does and doesn’t bring in money. That way, you’ll know what to focus on to bring in a profit or to increase profits.
You can manage your cash flow, but an accountant may know how much cash you need for certain things. An accountant can also help you apply for a loan if necessary.
3. Select a Business Structure
When you first start your business, an accounting consultant can help you select a business structure. You can operate as a sole proprietor, partnership, limited liability company (LLC), or corporation.
A sole proprietorship is the easiest structure to start and doesn’t require anything of you. If you want to set up an LLC or corporation, though, you’ll need to file the right paperwork with your state.
Not all businesses should have the same legal structure. An accountant can go over the differences regarding how you manage your money and how you’ll pay taxes for your business.
It helps to also talk to a lawyer at this stage because they’ll understand the legal implications. However, an accountant might know more details that you wouldn’t consider but that could make a difference.
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4. Set Up Accounting Systems
An accountant can also help your startup company set up accounting systems and processes. They might recommend a specific piece of software, or they can help choose a bank for your business bank account.
Creating the right systems from the beginning can save you a lot of time and stress. You won’t have to worry as much about making a mistake when entering transactions.
Of course, an accountant can also handle running the accounting software for you. They’ll be able to generate reports each month to show you if you’re on track to reach your financial goals.
But if you prefer to do the bookkeeping yourself, they can help you learn to use the software. That will allow you to be more efficient, and you can send the data to your accountant when tax time comes around.
5. Help With Finances
If you already have a startup business, an accountant can still come in handy. They can help you with everything from tax planning to running payroll for employees.
While you can do all of that yourself, it takes time. As you get your business off the ground, you may need to spend more time on marketing or speaking with investors.
If you hire an accountant, they can spend their days working on the financial side. You’ll still need to check in with your accountant occasionally, but you won’t have to do all of the accounting and bookkeeping.
That gives you more time to focus on the parts of your business that you’re good at and enjoy more. You can optimize your time to help grow your business more quickly.
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6. Forecast Profits and Losses
Another benefit of having an accountant is they can help forecast your business finances. Being able to predict profits and losses can help you prepare for those things.
For example, if you expect a significant loss, you’ll know to cut back on spending. If you’re expecting significant profits, you might decide to hire another employee.
Financial forecasting can be difficult for many business owners. Accountants have the skills and knowledge to predict those things, so they might be more accurate than your forecasts.
Of course, there’s always a chance that your accountant’s predictions will be off. However, you don’t have to worry about making the predictions yourself.
7. Get Investors
Many startup business owners will need outside funding, and investors are an excellent source of money. However, you need to back up your pitch with evidence of future success.
An accountant can help you draft a financial plan to show to potential investors. They can also give you a copy of the financial forecasts to include in an investment pitch.
You might still struggle to get some investors on board, but having financial plans can help. Having those plans come from an accountant can also add a bit of legitimacy to them that your own financial plans might not have.
Without any financial plan, though, you’ll have a tough time getting investors to take you seriously. Ask your accountant for a financial plan before your next meeting with investors.
Will You Hire Tax Services?
Tax services are essential for starting and growing a startup business. You can get help on your taxes as well as predict future finances to make sure your business will succeed.
While it’s possible to do some accounting on your own, a professional can answer your questions. They’ll also save you time so that you can dedicate more hours to other tasks.
Do you need accounting services for your startup? Learn about our services and contact us to get started.