After starting your company, many of you have to decide on who controls the finances of your company. The number one reason why most of the start ups fail is because they run out of cash. So common reasons are that many entrepreneurs underestimate their costs for the near future and mismanagement of funds. Hence it is imperative for a startup to make sure that its finances are in order. The following are the 5 ways you can use accounting firms to fuel your startup journey.
Reduce your costs
A Startup typically has to hire a CFO, controller, and a bookkeeper to manage their finances. But they not have enough volume of work or the budget. By hiring an accounting firm, you can avail the services of all the above three without having to keep any of them on your payroll. Typically, you save your costs by 50% by outsourcing your finance needs to a professional firm.
Leverage the combined experience of experts
You can leverage the expertise of groups of people that have worked in many different environments, so they bring a lot to the table. Accounting firms serve clients of diverse sectors ranging from Infrastructure, manufacturing to Technology, and knowledge from one sector could be applicable to other sectors
Focus on your core operations
Regular ongoing tasks - payroll setup and processing, bookkeeping, financial statement preparation, financial analysis and budgeting/forecasting will distract you from your core tasks. With their regular use of the latest tools at their disposal, accounting firms achieve great efficiencies and speed in doing the above tasks which otherwise might be painstaking and slow for startups.
Get valuated to improve your pitch before VCs
Venture Capital firms invested $762 million over 206 deals in India during the twelve months ended December 2012, according to a study by Venture Intelligence. These VC firms look for trusted and reputable companies so that their investment is in safe hands. Working with professional accounting firms to have your books audited is an important step in becoming a reputable company in the marketplace.
Stay informed about tax law changes
Tax work is typically a separate function from the back-office accounting function. This is because tax law is complex, and having in-depth knowledge is a specialty. Tax laws change every year through the budget presented on the last day of February. Apart from that, in every law, there will be a minimum of 20 amendments in a financial year which businesses need to be aware of.