Entrepreneur Looking Over Financial Records

Why Do Entrepreneurs Need Accounting Services?

Ask any successful entrepreneur what the most challenging part of running a business is, and they will more than likely mention accounting as one of their biggest challenges.

Business bookkeeping is much more complicated than simply balancing the checkbook each month and paying the bills on time. It involves careful tracking, reporting, and verification to ensure all the numbers line up correctly at the end of the month, quarter, and year. Many small business owners think, “I took accounting classes when I got my business degree, I can handle the books for a bit as my company grows!”

Unfortunately, even the most skillful entrepreneurs struggle with bookkeeping and money management sometimes, and that’s because it isn’t the job they’re meant to do. Business accounting has many nuances, especially in the startup phase. Because of this, intelligent entrepreneurs eventually see the benefits of hiring an accountant to help them out.

Accountants Help Entrepreneurs Get Businesses Off The Ground

Starting a business from the ground up requires lots of time and energy. However, it also involves careful financial planning so you can scale the business without going broke.

Founders often wear many hats as they get their businesses off the ground, but keeping up with too many tasks can lead to mistakes and missed opportunities. This is why having a solid accountant on board from the start can really help entrepreneurs out — they can wear a few of the hats related to startups.

Business Licensing & Startup Details

Before any entrepreneur can begin a new business venture, they must register their business and begin taking the necessary steps to register and file all of the required paperwork for licensing and doing business. This includes deciding what type of business to register as, like a sole proprietorship, limited liability company (LLC), or corporation, and making decisions about bank accounts and bookkeeping.

If an entrepreneur has a reliable accountant, this makes these licensing and accounting decisions that much easier. Any experienced accountant can list the benefits and challenges of each type of business license. They can also help you compare fees, transaction limits, minimum balance requirements, and other details about business bank accounts from different providers. These startup details matter because they will set the stage for future growth and financial success for the business.

Financial Planning & Expense Tracking

Entrepreneurs often start their businesses with little money in the bank. To gain funding and grow, these business owners must predict their future revenue and operating costs to determine the assets they need up front to scale their dream. This requires careful analysis and an in-depth understanding of business accounting that many entrepreneurs don’t have when they start.

Luckily, this is precisely the type of work accountants are trained to do.

Accountants can use spreadsheets and other tools to map out business projections for both revenue and expenses. This information can help entrepreneurs decide on budgeting, investments, and innovative growth strategies. With this information and a clear financial plan, startups can avoid burning through their cash too quickly and closing the shop before they even get off the ground.

Furthermore, accountants can help founders track early expenses and monitor all costs related to start-up and the early stages of the venture.

Well-organized expense tracking with detailed categorization and meticulous notes can give investors and founders all the information they need to see which aspects of the business are leading to financial gains and which are turning up as losses. This information lets the leadership team make necessary changes and improvements to keep the business churning in a good direction over time.

Establishing Procedures

Once all the early decisions have been made, and a new venture starts taking off, many financial procedures must be followed. This is another place where having an accountant can help a founder in the early stages of his business.

As a business takes off, procedures become necessary for all aspects of the business, especially those directly tied to money management. There are expense reports, profit and loss statements, tax preparations, monthly budgets, and other documentation required by the government, business investors, and other stakeholders. An experienced business accountant will set the stage for these reports and draw up procedures for your team members to follow as the company grows. This ensures you start on the right track and stay there without drifting into bad bookkeeping habits.

Accountants Maintain Accurate Books

For any business to be successful, its owners and operators must keep a close eye on the bottom line. This means the company needs to manage books, balance the books, and plan out clear financial strategies going forward.

Some of the records an accountant can help entrepreneurs keep up with include:

  • Accounts payable & receivable
  • Business expenses
  • Payroll
  • Sales records & purchase orders
  • Invoices & receipts
  • Employee information
  • Bank statements & tax documents

Without accurate financial records, businesses can quickly run into problems. This not only makes it difficult to track cash flow or see a clear picture of your business success, but it can also create problems during tax season or other moments when you must report to someone else. This is where many startups get into trouble, especially if the founder doesn’t have a strong accounting background.

Accountants Help Entrepreneurs Grow The Business

Business growth is a delicate balance of keeping costs low while raising revenue as high as possible. When accountants maintain clean financial records, it makes it easier for entrepreneurs to spot growth opportunities both through minimizing expenses and maximizing profits.

When accountants categorize and track expenses over time, they can spot trends and look for ways to adjust the costs before they eat into profits. They may spot problems before they even impact the business’s long-term financial strategy or see ways to adjust expenses that lower the financial burden. This could help entrepreneurs save money as they grow their businesses.

Similarly, accountants who maintain outstanding records can also spot early trends in sales and profits that may give entrepreneurs an early leg up on revenue strategies they can maximize. Specific reports and data can help accountants predict whether slight price increases will help or harm sales trends. Seeing where profit margins land can help entrepreneurs decide how to take the business forward.

All business growth requires careful strategic planning, which a skilled accountant can help with.

Remote Quality Bookkeeping: An Entrepreneur’s Financial Best Friend

One of the most challenging parts of business startups involves keeping costs down. This comes down to smart hiring decisions for many entrepreneurs, and accountants can be quite costly. However, you don’t want to skip hiring an accountant altogether because they are critical in building a profitable business from the ground up.

So, what can an entrepreneur do to keep costs down and reap the benefits of an accountant? One solid strategy could be hiring a remote bookkeeper through Remote Quality Bookkeeping.

Remote Quality Bookkeeping provides accurate, efficient, and cost-effective virtual bookkeeping and payroll services to small and medium-sized businesses nationwide. You pay a single monthly fee but receive the experience and brainpower of an entire team of  CPAs, CFOs, payroll professionals, and banking specialists who know precisely how to help companies like yours thrive. We do everything from invoicing and payroll processing to budgeting, financial forecasting, and more.

We have years of experience and customer testimonials that show just how invested Remote Quality Bookkeeping is in its clients. If you’re an entrepreneur just starting your adventure or an established business owner looking to break into a new field, we’d love to show you exactly how we can help you make the most of your business finances. Contact us today to get started with a free, no-obligation trial, so we can show you what you’re missing out on when it comes to smart business bookkeeping.

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