It’s common for entrepreneurs and small business owners to feel uncertain about engaging an accountant in the early stages of their business. Rather than spend on professional services, they will attempt to manage their own accounting responsibilities in an effort to save resources. Whilst being thrifty make sense when you’re testing a new business model, it’s important that entrepreneurs make savings in the right areas of their startup – and accounting isn’t one of them.
Having worked with startups of all kinds, Wilson Pateras know that cutting corners on accounting services is to an entrepreneur’s detriment. Consulting with an expert in the early stages of your startup helps you avoid structural pitfalls, protect precious assets and stay on good terms with the taxman. An expert accountant assists entrepreneurs to make educated projections about their startup, allowing them to rest easy in the knowledge that tax compliance is taken care of. It’s from this place of empowered knowledge that businesses can scale confidently – which is, of course, the aim of every entrepreneur!
In this month’s blog, Wilson Pateras’ Swinly Perera (Finalist 2017 Young Accountant of the Year) shares her insights on the importance of engaging an accountant at the very beginning of your journey as a business owner.
Why should entrepreneurs engage an accountant from the get go?
- To ensure you have the right structure for your business.
An expert accountant can assist startups work out if they have the right structure for their business offering or whether they should consider moving into a different tax structure. The accountant can also present examples of how their startup would work within different tax structures – providing background on all potential structures whilst ensuring their business has the correct fit now and into the future.
- To ensure your business is compliant.
When entrepreneurs are in the throes of running a startup, focusing on growth and scale can leave them vulnerable, ignorant of compliance factors relating to taxation, insurance, and the like. The costs of negligence are high – startup or no – and your accountant will help you keep on top of these matters. At Wilson Pateras, we know that if our clients are well-informed about their obligations, they’ll make better business decisions in the long term.
- To ensure you are fulfilling your obligations to employees.
Are you employing people? Using contractors or engaging interns? If so, you have obligations as an employer. We’ve observed that many businesses who are long past their ‘bootstrapping’ days continue to trade as if they were an employer in startup, neglecting to stay abreast of their changing obligations. This is what we’d call risky business: if something goes wrong in your business and you’ve not fulfilled your obligations as an employer, you may be liable. Don’t leave this aspect of your startup to chance: work with an expert accountant now.
What accounting mistakes do entrepreneurs often make in the early days of their business?
Many small business owners assume that accounting software will be too expensive and too complicated to use – or that their business is too small for such an investment, and that they are better off running everything in Excel. If only they knew the headaches they could avoid by moving away from spreadsheets from day one! Modern cloud-based accounting software is simple, cost-effective and easy to use for newbie business owners. Wilson Pateras recommend their clients use Xero software for regular record keeping – a terrific, intuitive cloud-based accounting package that will scale with your business.
At Wilson Pateras, experience has taught us that engaging an accountant from the get-go is a non-negotiable for any entrepreneur or startup. You’ll find that your accountant will become a year-round business partner, protecting you from unnecessary risks, helping you to scale and assisting you to remain compliant. As you grow, they will also help to minimize your tax exposure and audit risk. When bootstrapping in the early days of your business, make savings in the right places – and don’t neglect to invest in an accountant!
Swinly Perera, Wilson Pateras
Finalist: Australian Accounting Awards 2017 – Young Accountant of the Year