When Should a Startup Invest in Accounting Services?

Written by Amanda Bower    |    Published: June 9, 2022

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Managing your finances on top of all the other aspects of running a new business can be overwhelming. If you find yourself panicking and sifting through invoices and receipts come tax time, it’s time to stop trying to do it all yourself and bring on a solid partner to handle your accounting needs.

We get it. As a new business owner, you may be hesitant to invest in accounting services. You’ve got enough expenses to worry about before adding another item to your expense list. But investing in a good accountant can actually improve your bottom line. Read on to learn more about the benefits of accounting services for startups and when to bring on an accountant to your growing company.

A Small Business Accountant Can Improve Your Operations

Employing an accountant for your startup business has several advantages. They’re able to make sense of your financial statements and give you the best advice to help you grow and scale. Here are six ways outsourcing accounting services can assist your business.

Startup Process

Accountants may assist business owners by utilizing their financial knowledge to help set the company up for success. An accountant can assist you in determining the best company structure (partnership, LLC, etc.). An accountant will implement the proper accounting procedures when you initially start to keep everything organized and in line with government rules and best practices.


Accountants assist organizations with routine operations by preparing and analyzing financial accounts monthly. The analysis will assist managers in making educated decisions based on the most recent records. Accountants may also assist with payroll management and calculating tax bills.


Working with an accountant will help a company flourish. Accountants can assist company management with liquidity management, inventory management, and business finance while their companies are growing or attempting to expand. They may also prepare projections and budgets to steer a company and ensure it is on track to meet its objectives.

Reporting and Regulatory Compliance

When you’re running a company, you’ve got enough to keep track of. Accountants guarantee that business owners adhere to regulatory rules so it’s one less thing you have to worry about. They will ensure that important dates are met, such as tax return filings and W2 submissions. Business accountants also assist an organization during an audit by supplying the right corporate data to the auditor. Having an accountant means that the data is structured and accessible, ensuring that the process runs smoothly. You may also be in the process of investing in HR services.

Prevent Accounting Mistakes

Accountants assist organizations in avoiding financial blunders that might cost them money. An accountant will help you avoid both tiny and major mistakes, such as overdrafts on bank accounts or missing a tax deadline, which might result in significant fines.

Signs Your Startup Needs Accounting Services

During the early phases of a company’s lifespan, the owner(s) may be required to wear multiple hats. Depending on the company’s needs, you may be the CEO, secretary, salesperson, accountant, or even an apprentice on any given day.

While you may be able to juggle this balancing act at first, it’s not sustainable as the organization grows. Financial planning and taxes, for example, become substantially more intricate and time-consuming, particularly if you work in an area with rigorous regulatory or compliance standards.

To that end, every expanding business eventually reaches the point when hiring an accountant is a must. But how can you determine when you should engage an accountant? By paying close attention to the following indicators.

You’re Spending More Than 10% Of Your Time On Accounting Operations

Your time as an entrepreneur is limited. You can’t afford to be pushed in a million different directions forever. It becomes too expensive to focus your efforts on projects that are not suitable for your skillset. Transactions get more sophisticated as the company’s revenue rises.

If you don’t have the time or skills to handle the many bookkeeping tasks, it might be time to hire someone who can because economies of scale and specialization are critical for corporate success.

Tax Season is Coming

Even for experts who understand the complexities and nuances of tax rules, standards, and regulations, tax season may be the most stressful period of the year. If you’re trying to manage your finances yourself, you may feel completely out of your depth.

It takes one error to land you in hot water with the IRS. Even little mistakes and oversights could result in an IRS fine. Simply not comprehending the regulations may mean missing out on opportunities to decrease your tax bills through discounts or business credits.


If the IRS requests more information about your tax filings, you should engage an accountant. If you end up being audited, you will definitely need an accountant to advise you through the process. Accountants are prepared to deal with the IRS and can help you navigate the situation as effectively as possible.

Unforeseen Situations

Personal matters might sometimes influence the future of your business. For example, if a business partner leaves or the firm is deemed a marital asset in the event of a divorce. Any of these events might alter the direction of a corporation.

In this situation an accountant can provide:

  • Tax advice
  • Business structure advice
  • Business valuation estimates
  • Financial statements for the sale of a company

You Need Reporting On Your Finances

Is your company at the point where you’re looking for investors? Your business’s financial records will be critical in the investor pitch and decision-making process. You need reliable reports for your profit and loss statement, balance sheet, and cash flow statement.

An accountant can create those documents quickly, ensuring that they are correct and include all relevant information. This way you can position your company for success and demonstrate value to potential investors.

Then, once you have secured financing, you will need to create financial accounts and reports regularly to communicate with your stakeholders.

The best time for a startup to invest in accounting services was yesterday. The next best time? Today, right after your morning coffee.

It is never too soon for a startup to invest in accounting services. Even if you want to perform your own weekly or monthly accounting, an accountant may help you with early-stage concerns.

You’ll also want accounting services come tax season as business taxes are much more complicated than personal taxes. An experienced account will make sure you pay the least amount of taxes feasible while ensuring you are compliant with the IRS.

There is no better way to keep your account in order than using cloud-based accounting services. Get premium cloud-based accounting services with hiline. We offer services from HR, finance, tax, and so much more.

If you need help managing finances for your startup, reach out to us today.

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