Managing your money right from the start is vital to the health of your startup.
When hiring an accountant, outsourcing your accounting, or hiring an employee to manage your books, you want to be absolutely confident in who you choose as they are responsible for managing your money.
Your accountant helps you navigate the numbers and make the best financial decisions. If the numbers aren't accurate, it can be hard to grow and succeed as a small business.
Let's look at what you should know before hiring an accountant for your startup.
Look at their qualifications
Yes, accountants are good with numbers. And, yes, they know how to create reports.
But, is this all you're looking for in an accountant?
We encourage you to look for someone who can communicate well. At one point or another you're going to need them to present information to your team as well as your investors, and you want to ensure it goes smoothly.
In addition, look for someone with experience working with startups and who is willing to learn about your business.
Know your needs
Before you begin the hiring process, you need to know what your startup needs. This helps you come up with a job description so you know who you're looking for.
For example, do you need someone with a good understanding of federal tax law? Perhaps you need someone who is skilled at handling your investment dollars.
Or, do you just need someone to do your taxes and payroll and take care of your accounts payable and sales invoices? Maybe you need someone who can help create budgets.
Think about all of these needs when deciding if you need part-time, full-time or even outsourced help.
Think about a CPA
This is something else to consider.
Do you need a certified public accountant (CPA)? This is a person with a college degree who passed a professional exam and has met all state licensing requirements.
CPAs can take on more responsibilities than regular accountants. Specifically, CPAs can represent your startup in IRS audits.
You can choose between the services of a CPA or an accountant who isn't a CPA. You'll note another difference usually lies in what you'll pay each person.
Ask for references/referrals
Know a little bit about your choice of accountant before officially hiring this person.
Ask around to learn more about your candidate and always check references.
This can be a great way to uncover any red flags or to get confirmation that your choice is a good one.
Find out the price
You should know the price before hiring an accountant. You don't want a big surprise when the bill comes.
Have your potential accountant thoroughly describe their fee structure to you and make sure you know any recurring monthly costs up front as well as any charges you'll incur for extra work.
Your startup needs an accountant.
We've looked at what you should know before hiring an accountant for your startup, but let's look at when you should bring that person on.
A good rule of thumb says you want someone to manage your money from the minute you take in your first investment dollar, hire your first employee or begin selling your products or services.
While you may think you can manage your money, and you don't want to outlay the cost for an accountant, it's an absolute must for your startup.
This person will handle your monthly, quarterly and annual financial reports, prepare info for your investors, and offer financial advice. In addition, your accountant takes care of all your tax returns and audits.
So, you can see that hiring an accountant isn't a luxury, but a necessity.
Are you a new startup ready to succeed? Are you looking to get your new business off the ground and watch it rise to success? We are here for you. We can help answer your questions and guide you through the process. Outsource your HR duties, finances, payroll and more to us. Contact Escalon today to get started.
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