Starting a business is always an exciting time, but it can also be daunting. There are so many things that need to get done before you even start your business. One thing that often gets overlooked is hiring an accountant. Hiring an accountant will help you prepare for the future and ensure that your finances are in order. So don’t wait another day to hire a professional!
Business Planning
An accountant can help you create a realistic business plan to make your startup more likely to succeed. There are many reasons why startups fail, and it’s essential for an entrepreneur not to ignore the warning signs from their own financials. An experienced professional is invaluable when creating a budget or developing projections because they have seen what works and what doesn’t in other businesses’ planning models before working with yours–bringing valuable experience into every step of your company-building process!
You want to build a small business that works. A good starting point is to ask yourself, “why are you getting into business in the first place?” Are you providing a service or a product, or is it a feeling that customers are willing to pay for and value? What business are you really in? Think hard about what it is that you ultimately deliver for customers and determine whether or not it is a business that is worth pursuing. Most often, it is not only a product or service that people are after. Therefore, to succeed for an extended period, focus on user experience, so people come back when they have such great feelings from being with your company!
The customer who is most important to your business might be lurking in the shadows. Once you know what type of business you are, narrowing down and identifying an ideal demographic is much easier. Of course, you need customers for a successful company, but don’t just look at demographics like age or gender: psychographics will help reveal why they buy from your brand.
When you start your business, you have to plan with your end-product in mind. Think of a systems mindset from the beginning, and you will save yourself a lot of frustration down the road. Work on “building the business,” not working in it. If all you do is start a company and do all the work, are you an entrepreneur? Or are you “self-employed?” The entrepreneur has a vision and is a dreamer. Entrepreneur lives their lives today as if it is the future. The employee is the individual contributor and technical master of getting things done. Early on in your business, you are both of these characteristics because you, as an entrepreneur, may not be able to afford an employee. So you wear both hats. That’s completely normal. But that doesn’t mean you can’t have a systems mindset from the get-go.
Focus on building your business as if one day you were going to sell it. What would your buyers want? They would like to see a company that operates seamlessly, with processes and systems for every aspect of its organizational structure. From finance and administration, marketing and sales, and product and delivery. All functions of your organization should be documented, with a management system in place. You, as the visionary, are at the top of this organizational structure, leading the company via innovation and strategy. However, you are just starting, so it’s ok to wear all the business hats. Just make sure you have different color hats so you can tell the difference and don’t get them confused. It’s essential to define roles for each aspect of your organization and be well aware of when you perform different job roles. When it comes time to build your empire, you will want to hire employees based on these well-defined roles. When it comes to supporting your business, that’s where you need a good accountant—one who has experience with cloud accounting and knows how to get the business books organized and automated.
Should you incorporate your business?
Should you incorporate your business or run it as a sole proprietor? Choosing the proper business structure is one of the most critical decisions an entrepreneur will make, and understanding the pros and cons can help. The tax implications may be advantageous, but there are also legal considerations to consider before making this decision.
Register for Tax Accounts
There are many different programs to register for when starting a new business. It’s not always easy to tell what you need, so an accountant can help you figure out which ones are required. They can save time and money in the long run. Here are a couple of tax accounts you will want to consider.
Register for GST/HST so that you can claim input tax credits on expenses paid. For example, if you are about to purchase an expensive piece of equipment for $10,000, you will be spending 5% GST on that purchase (if you live in B.C.). However, you can get that $500 back when you file a GST return if you make sure that you have registered before purchasing that equipment.
Register for PST or provincial sales tax. Determine what provinces you will be doing business in. Every region has its own rules and regulations around sales tax, so it’s crucial to determine where you need to register to comply with provincial authorities.
Register for payroll if you have employees. Payroll is significant to get right since your employees depend on you to do this accurately. If errors are made, they are very costly to fix, and CRA loves to audit your payroll account. So don’t make any errors! Get set up correctly from the start, and before you have employees you need to pay.
Hire an Accountant to Help you Determine Whether Dividends vs. Salary is Better for You
There are pros and cons to each of these methods, and trying to figure this out on your own will be a fool’s errand. If you choose to hire an accountant, they can explain what is better for you in layman’s terms. Everyone’s situation is different, and laws and tax rates are constantly changing.
Many entrepreneurs overlook long-term factors, such as retirement strategy – RRSPs and long-term investments and principal residence – when do you want to purchase a home and for how much? To determine which method is best for you, it’s a good idea to hire an accountant. A lot of entrepreneurs have trouble understanding the shareholder loan and what that means. Discussing with your accountant earlier on will make sure you don’t make any poor tax planning decisions.
Hire an Accountant to Determine Technology for Bookkeeping
When you start a business, it is good to have the right accounting software. Of course, you might think it’s a good idea to start with a spreadsheet, and we agree that’s better than nothing! But sooner or later, you need something more intuitive. An accountant can help you get set up with a proper technology stack and provide you with tips for cloud accounting and online bookkeeping.
We understand this kind of stuff may be way over your head, and that’s why we are here to help simplify this for you. By working with your accountant on your cloud accounting setup, you will be set for success with an automated and straightforward system to understand. It’s a little more work up-front, but the payout is massive in the long run. Time is the most valuable resource we all have, and it’s up to you as the entrepreneur to make sure it’s used wisely. Use your time wisely by hiring an accountant to save you time and money and, above all else, keep those books clean and organized.
Hire an Accountant Who Can Also Be Your Consultant
With all the improvements with automation, accountants need to be doing more than just crunching numbers and telling you how much tax you owe. We are here as your strategic advisors and consultant. An outside opinion is valuable when it comes to the growth of your business. Whether you meet monthly, quarterly, or annually with your advisor, the time is well spent and keeps your business moving in the right direction.
Conclusion: Hire an Accountant!
Hiring an accountant can save you money and give you back the time you need to take care of other things. It also reduces the stress in your life, which will help make it better and improve your mental health. We have experience assisting businesses in each stage of their process, so we would love to help you too! Contact Argento CPA today!
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.