Navigating Financial Management: Why Startups Need Specialised Accountants

Understanding the Role of Accounting in Startups

You may already have a bookkeeper to handle your day-to-day finances and transactions. However, accountants for startups have a far wider remit.

An accountant will help you to remain compliant with tax and other financial regulations. They will analyse your business’s finances to give you an accurate picture of your financial health. They’ll help you with strategic planning to ensure that your cash flow remains robust, as well as helping you economise so that your outgoings aren’t unnecessarily eating into your profits.

They can assist with securing funding for business growth and creating scale-up plans that are accurate and achievable. They can help you to budget for leaner months if your business is likely to experience seasonal fluctuations. Ultimately, they’re an invaluable part of your business: a partner that will help you to learn, comply, economise and grow in a number of different ways.

Navigating Financial Management and Budgeting

Professional accounting for startups can help you to establish the current financial health of your business. This is vital for making genuinely informed decisions about everything from managing expenses to ways to generate revenue to investing profits for the future.

However, it’s not just financial planning that’s important; accurate budgeting is too. Dedicated accountants for startups can help you create realistic financial forecasts and budgets, helping you understand more about how your business operates and make plans for future profitability and growth.

Meeting Compliance and Regulatory Standards

As a startup, there are many regulatory and legal requirements that you’ll have to bear in mind. These include company registration, financial reporting, payroll requirements, filing and paying taxes and more.

Getting all of this right can feel challenging – particularly if this is your first experience of company ownership. You’ll want to be sure that you do everything by the book and avoid paying more than you’re required to – which is where a startup accountant comes in.

Managing Cash Flow Effectively

Do you know how your business is really performing financially? Are you aware of how your expenditure and sales figures are affecting your profit margins? Do you know that you’ll definitely have enough cash in the bank to cover all of your expenses and operational costs, even if sales were to fall back temporarily?

A good accountant will be able to furnish you with techniques for monitoring and managing your cash flow, keeping your bank balance looking healthy, ensuring that you’re prepared for any setbacks and making your business look as attractive as possible to potential investors.

Analysing Performance for Business Health

As a business owner, you want to be sure that you’re on the right track – and there’s more to success than great sales figures and profit margins. Using professional accounting services, you can track and improve your performance. Accountants for startups will look at a range of metrics to benchmark your performance against industry averages, as well as identify any trends that could help you to manage your business more effectively going forward.

Leveraging Accounting for Financing and Investment

You may not be looking to secure a business loan or attract outside investors right now, but this may be something you need down the line.

Both lenders and investors will want to see accurate financial records before they decide whether to put money into your business. Incomplete information will make them question the legitimacy of your business. It will also mean that they cannot accurately assess the potential of your business or the risk involved in lending or investing in it.

Accurate records not only make loans and investments more likely to happen, but they also give you ideas as to how your startup’s financial health could be improved for future funding requirements.

Making Informed Strategic Decisions

There are many strategic decisions you’ll need to make as a startup owner – and when you first start out, these may need to happen frequently. These decisions might include looking for ways to reduce your costs and overheads, as well as how to expand – via new markets, new products or new ways of selling your existing products or services.

You’ll need to understand which of your products or services are the most profitable (and which may actually be losing you money) so you can decide where your focus should lie.

One of the many benefits of professional accounting for startups is the ability of your accountant to use all of the financial data that you have within your business to help you make these strategic decisions.

Optimising Tax Planning and Savings

You may be well aware of what you need to do to file your business and personal tax returns. But are you aware that you could potentially – and legally – be paying less tax?

Accountants for startups are well-versed in the best ways to help save you money. They can advise you on the best company structure to choose to keep your tax payments down, as well as letting you know about relevant tax reliefs that could help your business. There could well be many tax benefits available to you that you are unaware of: accountants are there to help.

Identifying the Right Time to Hire an Accountant

If you’re unsure whether your startup needs an accountant, the following signs may suggest it’s time to consider it.

• You’re thinking about setting up a business but aren’t sure how to go about it in terms of company structure and registering with the right authorities.
• You already have a startup, and you’re struggling to keep your paperwork organised.
• You’re uncertain as to whether you’re filing your taxes in the right way and are not sure if there are areas where you could be making efficiencies.
• You’re seeking advice on what is classified as legitimate business expenses and what can’t be included.
• You’re struggling to reduce your outgoings to ensure that you always have enough cash in the bank.
• You’re finding it challenging to plan your business’ financial future.
• Your bookkeeping and accounts are taking far too much time, which could be better spent on growing your business.

If any of these apply to you, it may be time to look into specialised accounting for startups.

Keeping Essential Financial Records

For compliance and efficiency alike, there are several financial records that startups should maintain.

Essentially, these comprise all financial transactions: everything that you have either received as income or paid out as an expense. These include, among others:

• Bank, credit card, loan and other financial statements
• Invoices and receipts for purchases and legitimate business expenses
• PAYE records
• VAT records (if your business is VAT registered)

By keeping these records up-to-date, you’ll not only ensure that you stay on the right side of HMRC, but you’ll also be able to run your business more efficiently and better understand your startup’s financial health at any given time.

If you feel that your small business could do with specialist accountants for startups, UK-based QAccounting is here to help. With decades of experience in startup accounting, we’re here to make your life easier and your business more efficient and compliant. Contact us today!