Business Advice

Is it the right time for your startup to hire an accountant?

By May 1, 2019July 23rd, 2019No Comments

There are lots of ways to save money when you’re starting your own business.

You can buy second-hand equipment. Or look for free software. Or negotiate for discounts.

One thing that doesn’t work? Taking on the financials yourself.

We know the desire to do things by yourself is strong. So is the desire to save money by going DIY with your numbers. We see over and over again that it doesn’t actually help cut costs, though.

For starters, think about the time you pour into keeping your books and balancing your accounts. Is it really the best use of your hours and energy when it pulls you away from your business? And if you make a mistake, is it worth it to pay someone to redo all that work – or pay the penalties?

That’s why it’s important to know when you need that extra help before you really need that extra help.

When’s the right time?

Most startups enlist our help a bit too late. You don’t have to make that mistake as long as you reach out for advice at the right time:

When you incorporate
The right accountant can advise you about your company’s business and legal structure. They can also get your registrations in order and work through any red tape.

When you have revenue and expenses
Your accountant can set up cloud accounting software and teach you basic bookkeeping. Getting records right when things are simple means you’ll have an easier time once they become more complex.

When you have payroll
Payroll (plus the regulatory and compliance stuff that come with it) gets complex, fast. An accountant can help you sort out how best to pay yourself and your team, while keeping the government and regulators happy.

When you need investment
A solid financial plan goes a long way to inspire confidence with investors (or even the bank). You’re more likely to get funding if you have your business plan, current numbers and future projections in order. That’s where we come in.

When you have investors
Investors want to know about your business’ financial health. That means reporting on your operations – sales, expenses, cash burn and more. Even if you don’t have investors yet, an accountant can track those numbers so you know what’s happening behind the scenes.

When it’s time for government reporting
If you’re generating revenue, an accountant can organize your reporting so you know what you owe and when for things like HST. If you aren’t making sales yet, you still need to report in with the government. Either way, we can help.

If you get audited
Hey, it happens. An accountant can make the process go smoothly by getting your books in order and working with auditors to provide the right information. We can even double-check that the process happens mistake-free.

When you grow
Growth comes with increased complexity. Accountants are experts in complexity. We dig into the story behind your financials and look into the future of where your company’s heading. That’s why we’re great business advisors beyond crunching numbers.

If you don’t know, ask

Chances are, if you don’t have a financial background, accounting isn’t your strength.

We’re pretty good at it, though. And we’ve done a lot of retroactive bookkeeping with startup companies and small businesses who’ve tried to handle all of this themselves.

We know what costly mistakes come up most often, like:

  • Not claiming expenses or input tax credits you’re eligible for
  • Making mistakes in HST reporting, resulting in audits and penalties
  • Payroll remittance mistakes resulting in large penalties
  • Not setting up accounting software correctly
  • Investing in systems that don’t suit your business or result in a lot of manual work
  • Missing out on valuable integrations in your technology stack

And there are tons of other benefits to hiring an accountant too. We also help businesses plan for future growth, find efficiencies and understand key business metrics.

If you’re not sure if you’re ready for an accountant, it’s better to ask. After all, it doesn’t have to mean bringing someone in full- or part-time. You may only need some help with a few transactions per month, and that’s okay.

That’s why we offer our first 30-minute consultation free of charge. It’s a chance to understand your business goals and come up with an approach that’s right for your company, whatever stage you’re at.

Are you ready to bring on an accountant? Not sure if it’s the right time for you? Either way, let’s talk.

About Element CPA

Element CPA is an innovative accounting partner that’s 100% focused on helping Canadian startups and small businesses get their books in order, operate more efficiently and plan for the future. We handle the day-to-day financial operations that make your business run, tell the story behind your numbers and provide advice as you grow.