As an entrepreneur you have a great idea for a new business. You want to see where it can go, but you also want full control because this is your passion and you want to do everything your own way. So, you google “how to open a business” and before you know it, you’ve formed an LLC, created online accounts here and there, and BAM! You are now the proud new owner of a business!
You’ve put all of this into motion, and within a few months you’ll become too busy to do everything on your own. Now you decide it’s time to get some help to make sure your finances are in order. We see this often with new business owners, but there are major benefits of factoring in the cost of an accountant into your budget from the beginning.
Entity Selection Assistance
As noted, one of the first steps in getting a business started is to select the structure for the business. Your business structure affects how much you pay in taxes, the paperwork you need to file, and your personal liability. If you form your business as one entity and later discover you chose the wrong type, you can change it, but you’ll have to pay to restructure and it might require legal assistance.
Most entrepreneurs will choose between these options for their entity structure:
Sole Proprietorship
You won't file a separate return, but you will be held personally liable for the debts and obligations of the business.
Partnership
The general partner has unlimited liability while other partners/investors generally do not.
LLC
S-Corporation
(Please note: The above descriptions are generalized for the purpose of this blog. Entity selection will require an in-depth discussion of your business plan and long-term goals.)
Along with the choice of entity, there are also several deadlines and forms to be filed to maintain any business. Knowing what and when to file depends on what type of entity you’ve formed. Click the button below to email us if you need advice on entity selection.
Online Software Accounts
Who will manage my books? What type of accounting software should I use? Does it have an integration feature for my industry? What is a reasonable fee for an accounting software? These are just a few of the questions you should ask yourself before buying online accounting software. The automated technology available today can be a business owner’s best friend, or worst enemy. There are many options available to choose from and each one will take time to learn. Our two favorite options for small businesses are Xero and QuickBooks Online. Most of the time, we see business owners create an account with QuickBooks or QuickBooks Online (QBO). It is an incredible application when used correctly because it can simplify your day to day accounting.
However, there are downfalls if you do not take the time to learn or understand a few bookkeeping and software principles. For instance, QBO can be automated to read bank and credit card transactions, but it doesn’t always get it right. Because it is automated, many business owners do not designate time to go in and review every month. In fact, more often, we’ll see these accounts aren’t checked until it’s time to file taxes or get a certified financial statement to provide to your bank for a loan. By that point, if several months have gone by without realizing a mistake like this, it will be costly to fix.
Most accountants will charge a clean-up fee because it can take a lot of time to undo and correct the work that was so quickly created through automated bookkeeping technology.
Even if you don’t use an accountant for the day-to-day software upkeep, it is critical to have advice on setting up your accounting software from the beginning to avoid surprises down the road. At Avizo Group, we’ll take the time to explain your options, show you how different software looks, and even provide training for you to make sure your books are accurate.
Financial Expertise
You likely have a passion or unique talent that lead you to the path of starting a business. But passion is not enough to succeed in today’s business world. Having a financial expert by your side from the beginning can increase your chances of success.
Yes, we can save you money in the long-term by making sure you form the right type of entity; we can show you software options and how to use them correctly; we can make sure your required forms are filed and payments are made. But more importantly, we can partner with you as a guide. Our team members have built their expertise through working with hundreds of business owners over the years. We can help you understand the financial impacts when making choices like expanding your team or adding new services/products. Our goal is to offer advice and options that allow you to make the decisions that will keep your passion alive.
Our CAS Team
