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This is the first person every small business should hire

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A financial advisor meets with a client at his home.

Image source: Getty Images

Your business needs a financial management hero.


Key points

  • There are many steps in starting a business.
  • An accountant can help you every step of the way, from creating your business structure to paying taxes and beyond.

If you’re dreaming of starting your own small business in 2023, you’re probably envisioning everything you need to do to set yourself up for success. Ideally, that means writing a solid business plan, considering your start-up costs, maybe applying for a small business credit card, and determining whether you’ll need to rent or buy space for your new business. company. Among all these questions to answer and facets to consider, here is one you really should think about: hiring an accountant.

It takes time for a small business to grow and start making real money, so you might be wondering, “Why should I immediately start paying someone other than me?” Small business accounting involves many steps, and having an accountant in your corner from the start can save you a lot of time, potential headaches, and tax liabilities. Here’s why.

What is an accountant?

Accountants wear many hats. Ultimately, an accountant is a professional who maintains and oversees financial records. “Accountant” is another term you’ve probably heard in connection with small business finance; the terms are sometimes used interchangeably, but they are not the same thing.

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Accountants perform some of the same tasks, but generally do not have the same level of education as an accountant and focus more on recording financial transactions than interpreting them. In short, an accountant can be an accountant, but an accountant is not necessarily an accountant. Another term you might hear is Chartered Public Accountant, or CPA. This is an accountant who has passed a CPA exam and meets state licensing requirements.

For your small business needs, this type of professional will help you manage your day-to-day expenses, create documents to track the progress and financial health of your business, and oversee tax filing to ensure you are paying. the right amount. and get all the deductions you are owed.

How can an accountant help you early on?

The reason it pays to hire an accountant once you’ve decided to start your business is that they can really help you every step of the way. One of the first things you will need to decide is how to structure your business. An accountant will know the legal and tax obligations involved in starting, for example, a limited liability company (LLC) versus an S corporation, and can help you choose.

An accountant can also prepare your business finances for future success by advising you on which accounting software you should buy. They can ensure that your financial procedures comply with government regulations. Remember that you definitely do not want to be audited! And they can help you get started on the right foot with business banking and learn how to separate your personal and business expenses.

Establishing the right financial foundation with the help of an accountant can make it easier for you if your business takes off and you find yourself in the fortunate circumstances of expanding, hiring employees, etc.

Remember that you don’t have to hire a full-time accountant upfront – you can find one to consult regularly and pay for it as a contractor. If you know of other small business owners in your area or industry, ask around and see if any of them can recommend a good accountant. Hiring one will be time and money well spent to get your small business in the best possible shape to grow and succeed.

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