Many owners of startups don’t want to hire a chartered accountant (CA) mainly because they think they don’t need one. In addition, a lot of startups have limited budgets, which might be the main reason why hiring a CA is often out of the question.
While that may be true in the beginning of the business venture, it could prove to be a mistake later on as the startup begins to evolve. There are many reasons why startups should hire, or at least consider hiring a CA as it can make all the difference between success and failure.
Finance professional
For starters, these highly trained professionals can give you advice on your business plan or help you create one. They can take care of all the financial aspects of running a startup that includes services like complete management of banking affairs and capital raising through networking and venture capitalists. They also keep track of your expenses, revenue, safeguard your assets and resolve any financial practice problems in general. Having a good chartered accountant to deal with any of these problems will immensely help a budding startup.
Tax knowledge
Tax-related issues are one of the key financial areas startups regularly come in contact with. That is why chartered accountants play a vital role in startup operations. Since the majority of transactions involves a thorough tax knowledge, chartered accountants can handle both direct and indirect taxation and any other forms of tax with ease. They will also be able to explain the advantages and disadvantages of c corp vs llc and many other tax topics.
Business structure
A lot of businesses don’t succeed because they were lacking a plan, had very little organization or just had poor planning in general. Using their knowledge, CAs can help with planning, data management or simply give advice, which in turn could lead one step closer to success.
Virtual CFO
Since startups are generally formed by people with little or no financial knowledge, they need someone to handle all the facets of financial processes in an organization. Hence, a chartered accountant can act as chief financial officer (CFO) by addressing non-compliance issues and other similar matters.
Industry insight
Chartered accountants bring a high level of experience and knowledge into industry operations. They have access to financial information of many businesses and also know best practices and which mistakes to avoid. Having the insight into successes and failures of other businesses can be invaluable.
Advisory
Since startup is a venture into an unknown, often good advice can be of the essence. With their knowledge of finance and tax management, as well as business structuralization, a CA can play an advisory role that could greatly benefit a startup.
Conclusion
In today’s fast-paced business environment, businesses and opportunities are developing rapidly and managing of business accounts becomes more and more difficult. While it may not look important to hire one at the beginning, having a chartered accountant right from the start or in the early stages of the business venture will have numerous benefits for a startup. They can perform a variety of roles and lend their expertise and counsel which, in turn, could save time and increase income early on.
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