<\/p>\n
Many startups outsource their financial reporting and management functions, both to save money and to get professional accounting and finance services that would be difficult to locate and hire. As the company grows, management eventually hires the appropriate personnel and brings these financial functions in-house. However, with the current economic slowdown, some startups that may experience slower than projected growth are choosing to \u201cre-outsource\u201d their financials. The value of having someone who understands your complete financial situation really can\u2019t be overstated. Firms that rely on automated accounting systems or who provide limited services can easily miss potential problems, like invoicing issues, double payments, and missed collections. Your accountant should function as a partner, who supports the success of your startup and helps your company achieve its goals.<\/p>\n<\/p>\n
Especially as a founder, you need to know what your expectations are and how you\u2019re doing against your expectations. Now you can either do your own accounting, or you can bring in an outsourced startup accounting firm to help you out and take this burden of bookkeeping off your shoulders. Startup owners may be tempted to cut corners by managing their accounting personally. However, unless you\u2019re somebody who has accounting and tax experience, we don\u2019t recommend this approach.<\/p>\n<\/p>\n
<\/p>\n
When Dave started his radio show, people began asking him to recommend trusted professionals they could go to for financial help. That\u2019s why he created the small-business tax Endorsed Local Provider (ELP) program. These guys are local and love to talk tax planning and bookkeeping. Plus, you\u2019re not starting from scratch\u2014these are Dave-approved professionals. If you\u2019re comfortable with numbers and the process of accounting, you can try to do it yourself.<\/p>\n<\/p>\n
This is becoming an increasingly important part of later-stage due diligence and M&A diligence, so make sure you have an experienced startup accounting firm if you are raising big VC $$. It\u2019s common for small business owners to overpay both federal and state taxes because they don\u2019t understand the tax codes and which tax credits and deductions they may qualify for. An efficient COA ensures accurate categorization and tracking of financial transactions, facilitating easy monitoring of revenue and business expenses. With a well-managed COA, startups can make informed business decisions based on reliable financial data. The most obvious role of an accountant is developing the right chart of accounts (COA).<\/p>\n<\/p>\n