Most of the owners of startup companies believe that hiring a professional accountant is not necessary. They usually believe this, because of lack of funds and due to desire to minimize expenditure. Although, hiring a professional accountant is expensive, but accountant gives a lot of benefits to the business. He/she helps to provide quality financial information to enhance informed decision making, effectively and efficiently manage cash flow and others. So, this article explains the benefits of hiring an accountant for startup companies.
The benefits of professional accountant to startup companies
Forecast financial estimates
For the startups to get funds from investors or lenders, they need to provide forecast financial estimates to submit to them. The accountant helps the business to prepare and present a business plan to the lenders or investors. The business plan will contain the projected financial statements, background information about the company, market plan, strategic and growth plan, and others. The plan is the first thing to connect the business to the investors and lenders, therefore it is important for startups. So, it explains the reliability of the project.
The accountant also helps to determine the profitability of a business by preparing and analyzing financial statements. Through the help of accounting, the startups can determine the growth of the business. So, it helps to know whether the business is making profit or loss, the percentage of expenses to sales revenue. It helps to know whether assets are generating enough profit or not. All the financial information helps the stakeholders to make a rational decision about the business.
Another vital function of an accountant is the preparation of a budget for startup companies. The accountant helps the startups to budget for different functions of the business. So, doing this helps to prevent or minimize wastage of the company’s resources on non-essential aspects of the business. However, the budget can be capital or revenue expenditure.
Calculation and filing of tax
The professional accountant also helps startups to calculate and file their tax returns to the tax authority at the appropriate time. He/she also helps startups to minimize tax liability through proper tax planning.
Manage cash flow
More so, a professional accountant helps a startup business to manage its cash inflows and outflows to ensure that the company maintains an efficient liquidity position. Failure to manage cash flow properly will affect the attainment of the business’s success.
The professional accountant also helps startups with professional advice, experience, expertise, and education when setting up accounting operations for the company.
Additionally, the Accountant helps the business owners or executives to concentrate their efforts and time on other important aspects of the business after delegating the accounting services to him/her. So, they can focus their time on marketing strategies, production, human resources, and others to attain the corporate objectives of the business.
Can your startup avoid hiring a professional accountant?
No, if your startup cannot afford to hire a full-time professional accountant, you can hire other accounting services for your business. So, you can outsource your accounting function to an accounting firm or freelance accountant. By doing this, you will enjoy the benefits of hiring a professional accountant for your business. Because the accounting role is very important to the startup and growth of your business.
The benefits of professional accountants in Nigeria are very vital to the financial success of every startup company. So, every startup requires the services of a professional accountant. This is because he/she will enhance the achievement of the business goals and objectives. So, you don’t need to look at the cost of hiring a professional accountant only. You need to look at the benefits attach to it. However, Accounting software like QuickBooks Online, Sage, Wave, Xero, and others will assist Accountant in performing their services.
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Afeez is one of the founding partners of Marasas Consulting limited. He consults for both individuals and entities in the area of accounting, management, audit, tax, and investment. He has a wide range of experience both online and offline which allows him to provide relevant and timely professional advice and assistance to business owners with their accounting, tax, management, audit, and investment plans.
Afeez is a member of the Institute of Chartered Accountants of Nigeria (ICAN) and a member of the Nigerian Institute of Management (Chartered). He is a certified Google analyst and strategist. He earned his Bachelor degree in Management and Accounting from Obafemi Awolowo University, Ile-Ife, Nigeria, and earned an ordinary national diploma in Accountancy from The Polytechnic of Ibadan, Oyo State, Nigeria. He earned certification in “Excel Crash Course” and “Reading of Financial Statement” from Corporate Finance Institute, Canada.
Afeez is dedicated to helping clients achieve business success by helping them to establish solid and sound accounting, tax, and financial processes.