5 Ways an Accountant Can Help You Start Your Business

It has been said that there are only two things needed when starting a business: A great idea, and an accountant!

An accountant’s duties are often misunderstood by laypeople. Accountants work in the realm of compliance, mainly, making sure that you fulfil your fiscal obligations to the government.

But great accountants also offer others services. Here are five ways that an accountant can help your business.

Second opinion for your business idea

A “side benefit” of being an accountant is that they gain vast experience of all sorts of different businesses. A car mechanic only learns about cars. A painter only learns about paints and brushes and types of canvases.

But all these businesses have one thing in common: They must file their taxes. And they need an accountant.

As a result, accountants are often the “secret sauce” of excellent business consulting because they work with so many different businesses in different fields. Indeed, the most valuable business consulting one could have is that of how to manage one’s accounts.

Accountants have extensive experience in seeing what has worked for clients in different industries (and at different times) and so can bring a wealth of advice to the table when you bring them a business idea.

Review your business plan (forecast and financial model)

As experienced “number crunchers”, accountants can think with figures and can see meaning in those figures that many of us can’t see.

The challenge for many accountants has been to communicate these intricate significances to other people who are not so mathematically inclined.

Financial Models are an invaluable tool in getting everyday Janes and Joes (such as you and me) to understand their financial position.

Financial forecasts are also crucial in determining a business’s viability, and there is no one better suited to putting together a meaningful forecast than the “Number Crunchers” themselves.

Proper financial planning and understanding are essential if you plan on putting together an effective business plan in order to take out a business loan or get funding from investors.

Advising on legal structure

Accountants are, in a sense, “mini lawyers” and must understand fiscal law like the back of their hands.

As such, accountants are great assets when it comes to structuring a business entity so that its taxable footprint is as small as legally possible.

There are limits to this, of course. And lawmakers have gotten wise to all the “tricks” that many businesses have adopted to minimise their tax payouts.

But there are perfectly legal ways for a business or individual to optimise their tax structure. Doing so efficiently requires an in-depth understanding of tax law for that specific country. An accountant is an invaluable aid in these cases.

Manage your bookkeeping and accounting

An accountant is not a bookkeeper. It’s important to understand the difference.

A bookkeeper is responsible for filing and administrative tasks, keeping your books in order. Hence the term “book-keeper”.

An accountant is responsible for ensuring your company stays compliant with fiscal regulations and that you fulfil your filing obligations each year.

As the world of accounting has grown more competitive, accountants have additionally expanded into offering services such as financial advice and tax consulting. These are not, technically, accounting duties, although they do fall within the same umbrella of financial services.

In either case — whether from a compliance view or an advisory view — a knowledgeable and experienced accountant’s skills are utterly invaluable. When it comes to ensuring that your business uses its resources wisely while also staying compliant with the relevant fiscal authorities, bookkeeping remains an important function. Although software tools have taken over many traditional bookkeeping tasks, some accounting practices in countries like Germany, the Netherlands, Singapore, the United Kingdom, and the United States continue to offer these services. While not always highly profitable, they provide long-term value by saving time for both the client and the accountant.

Financial advisory functions

In recent years, many accountants have had to pivot to remain profitable. Online tools like Xero, QuickBooks, FreeAgent, and others have automated many traditional bookkeeping and accounting tasks. Some of these platforms even provide automatic filing services for individuals and businesses. As a result, many accountants have expanded their services to include financial advisory functions, with some now offering roles as a Fractional CFO, providing strategic financial guidance without the need for a full-time executive.

This is different from tax advice. Financial Advisory functions refer more to what to do with one’s money and, often, even where to invest it.

It’s important to not confuse the two trades: An accountant is not automatically a financial advisor, and vice versa. But many accountants have trained up and learned some of this trade in order to offer more value to their clients.

It’s convenient (and also advantageous) for an accountant to be able to offer financial advice in terms of investment and, to some degree, portfolio management. No matter where revenue comes from, there are (almost always) taxes to be paid. An accountant who is also an experienced advisor can assist in structuring your business’s wealth in such a way that its tax liabilities are minimised.