Most small-scale business owners believe that they should only hire an accountant once operations are stable enough to accommodate such overheads. It can be attributed to the fact that small businesses try to keep their operational costs as low as possible. Therefore, hiring an accountant early on does not contribute to this objective. However, a recent study found that 82% of businesses fail due to poor cash flow management, which falls directly under the financial accounting field. This article highlights the reasons why small-scale business owners should hire an accountant from inception.
Write an Effective Business Plan -- Starting a business is not easy, especially if you do not have adequate financing. For this reason, small business owners look for potential financiers who might be interested in their companies. Any financier worth their salt will ask for a business plan before anything else. In its simplest form, a business plan is a road map of business goals and the strategies to achieve the targets. Most importantly, an investor's decision to invest in a business or not will hinge on the financial section of a business plan. Therefore, hiring business accountants as early as possible will help you to develop an effective business plan that will increase your chances of landing an investor.
Set-Up Accounting Software -- As mentioned earlier, small businesses shun hiring accounting services early to keep operational costs low. Instead, some companies use accounting software since they are a cheaper option. However, poor accounting practices are an expressway to business failure, and this is what you expose your business to if you set up accounting software incorrectly. Although some accounting software is straightforward regarding installation, this isn't always the case for business owners that are new to enterprise software suites. Even if you do not need regular accounting services, you still need an accountant to set up your accounting software. It will ensure that you are on the right path from the start, at least as far as financial management is concerned.
Meet Creditors' Requirements -- If you run a supply business, the chances are that you will work with creditors, especially given the competitive nature of the retail industry. However, creditors will not just extend credit services to a new business because they lack a track record. Nonetheless, a professional accountant knows how to approach a creditor on behalf of small businesses, and they will help you to meet the requirements. The earlier you hire an accountant, the higher your chances of succeeding in the retail supply industry.