Every professional service that you associate with your business is an investment – not an expense. Hiring an accountant for your startup ensures that you’re free from the disastrous mistakes young businesses make. Be it mistakes of not knowing how to do their taxes or not knowing the right business structure. Every serial entrepreneur who has made something out of themselves knows that accountants are some of the important resources a startup can have.
And let’s be honest – at the start, it isn’t necessarily pretty. Nothing is structured, a proper chain of command hasn’t been established, and things seem to be running by chance rather than intent. It’s in these situations that we often have to go back and redo things, re-file our taxes, and it is also in these situations that we suffer our great losses. Because of reasons like these, the majority of startups aren’t able to mature into full-fledged companies.
However, startups that do manage to mature out of this phase, after overcoming these losses, are the ones that go on to make a difference. It’s never luck that sides with them – they are just better prepared than the rest. If you’re an experienced accountant, managing your accounts and finances won’t be much of a problem for you. But if you don’t have an accountant, things might get shaky for you at the start.
Having an accountant is essential, that’s why here are the top 6 reasons hiring an accountant for your startup is essential.
1. An Accountant Will Help You Determine the Best Business Structure
One of the most important reasons why your startup needs an accountant is because, without an accountant, you won’t know how to structure your business in Ireland. You can’t just pick any structure and start working on your startup. There are various tax and legal implications to take into consideration. At the start, you have to do what is in your best interests.
Probably a structure that imposes the least tax on your final revenue?
But the structure you pick also has to be relevant to your business. As businesses grow, their structures change, and so do their needs, that is why having an accountant on your team at all times is vital. It’s better to stick to one accountant who sees your business grow and starts preparing for everything beforehand. Hiring different people at different stages might not be the best strategy.
Here are some prominent differences between the two main business structures in Ireland:
|Sole Trader||Limited Company|
|Relatively simple to setup||A longer setup process|
|You’ll be personally liable for all your debts||You can gain credibility quickly|
|You won’t have to prepare your financial statements||Your private assets will be protected|
2. Accountants Can Make Sure You Are Registered for Tax and VAT Where Applicable
In theory, your accountant will pay you for their services just by the amount of money they save you from. They can save you from the taxes that are liable on your business and the fines that you’ll have to pay if you miss a certain payment. For example, the StartUp Refunds for Entrepreneurs (SURE) in Ireland can ensure that your business gets a refund on 41% of the amount you’ve invested.
But to be eligible for this amount, your business has to qualify for the refund according to the policy that has been set. In a situation like this, an accountant can not only save you money, but they can make you money, too.
3. Accountants Can Help You Start as You Mean to Go on
Another advantage of hiring an accountant for your startup is that they can help you with the record-keeping aspect of your business. Even if you’re a sole proprietorship, keeping a record of the revenues your business is making is essential for your cause. Monthly reporting of revenues allows transparency for you and the people who are associated with your business.
It is only through consistent reporting that you can see your revenue is increasing or decreasing. Increasing revenue can give you room for marketing campaigns, perhaps – but that can only happen if you know there has been an increase.
4. Accountants Know What You Can Claim
Another important aspect of growing your business is the grants and fundings that can be availed by your business. For example, grants in Ireland like:
- Lean Business Continuity Voucher
- Restart Grant
- COVID-19 Business Financial Planning Grant
Are just some of the grants that your business can avail in Ireland. The pandemic has been harsh for every business, and grants like these can surely help them recover. Having an expert accountant can help you take full advantage of these grants and save you from going bankrupt.
5. Accountants Can Help You With Tax Efficiency
Even though paying your taxes while running your startup in Ireland is essential, there are many ways you can benefit from this activity. For example, the Employee Investment Incentive in Ireland can provide your startup tax relief if the conditions are met. You might also be able to claim a tax deduction for some expenses that were incurred three years before your business came into existence.
These benefits can help you reduce costs drastically, and you can perhaps invest this revenue in the cost of sales.
6. Accountants Have Experience And Knowledge
Lastly, there are chances that if you’re hiring an accountant for your startup, you’re probably looking for one who has experience. An accountant who has experienced and seen startups get off the ground probably knows more than you do. Not only can these people save you from hidden costs, but then can also act as advisors, if you choose to listen to them.
Because of their past experiences, they’re still connected to the various startups they have helped, and you can learn a lot from their experiences. They can help you connect to a network of entrepreneurs who are in the same fishbowl as you.