Why Outsourced Accounting For Startups Is Essential
When you have a startup, you know you’re taking a gamble. You’re often operating in sectors known for rapid innovation, such as technology, healthcare, and finance. Startups may also be disruptive by challenging established businesses or creating entirely new markets. In other words, you have no guarantees when operating a startup.
While the nature of startups can be unpredictable, there are a few options to assist in minimizing risks. One of those options is using outsourced accounting for startups.
After reading this blog, you’ll learn how outsourced accounting can fit the needs you have as a startup and why working with a company like Powered by Centri benefits you.
What Specific Needs Does A Startup Have?
Simply stated, startups are complex. Even the definition of a startup can change depending on who you talk to. But, while the debate over who can call themselves a startup continues, startups usually have specific needs in common.
Financial Planning & Forecasting
Startups need to plan and forecast their finances accurately to understand their cash flow needs, budget for expenses, and make informed decisions about the future.
For example, if you were thinking about expanding, either a physical expansion of locations, staff, or equipment, or adding different deliverables to your product lineup, you’ll want to use reports to see what options are feasible right now or what should wait. These reports can also help you prepare for a merger or acquisition.
To make intelligent business decisions, you need all financial information available and reporting is one of the ways to gather this data.
Startups need to produce financial reports, such as profit and loss statements, balance sheets, and cash flow statements to track their financial performance. These reports also provide information to investors and lenders and show them if you are a sound investment.
Fundraising & Investor Reporting
Like almost everything in life, money plays an important role in startups. You’ll need to raise funds from investors, which requires financial reporting and compliance with any regulatory requirements. You also need to show lenders that you are a smart investment and will be able to pay back your loans.
One of the parts of having a successful startup is identifying and managing financial risks, such as credit risk, liquidity risk, and market risk, to ensure your company’s financial stability and sustainability.
If you own a startup that deals in physical products, you’ll need to manage your inventory levels, track the costs of goods sold, and calculate inventory valuations accurately. You don’t want to keep excess products since that costs you money.
You can also track when you should order seasonal products and which ones are your best sellers. These small details can have an impact on your bottom line.
What Are The Benefits Of Outsourced Accounting?
Now that we know what a startup’s specific accounting needs are, the next question we’re going to look at is how outsourced accounting can help.
First, it can save money because you won’t need to undergo the hiring process. You won’t need to take the time to place the job ad, conduct rounds of interviews, or find a recruiter to handle the process. All you have to do is find the outsourced accounting firm that fits best with your needs and then transition your startup’s accounting to them.
Plus in slower seasons, you won’t have to pay for a full-time staff member carrying a lighter workload. And you won’t need to shoulder the accounting burden yourself. You can also use those hours customarily spent on accounting on different projects to help grow your business.
With outsourcing, you simply work with professionals and figure out the best accounting solutions to make your business run seamlessly and then you can implement them. This eliminates the hours of research on your end trying to fix problems or find better solutions, especially if accounting isn’t your primary expertise.
It’s always better to avoid DIY accounting, if possible, to minimize any risks.
Looking for an accountant for your startup business gives you more than bookkeeping help.
Another benefit is that your outsourced accountant can also give you an outside perspective on your business and give you an unbiased opinion. Since they aren’t part of any business politics, they can suggest different solutions or tactics to grow your business without having an agenda.
Why Work With Powered by Centri
When you decide that outsourcing your accounting is the best solution for your business, you don’t want to work with just anyone. You want to work with a partner who will support your business in every possible way. At Powered by Centri, we strive to be the perfect choice for your startup accounting.
When you work with Powered by Centri, you have access to our team, who are experts in their niche fields and can guide you through the accounting process and answer all your questions. They can help you navigate the differences between in-house and outsourced accounting.
Our experts aren’t just focused on here and now—they’ll help you plan for your future. They can look at your financial reports and help you strategize ways to grow your business or help protect it from a fluctuating market.
Using cloud-based accounting software, our team can even help you find the best one for your business and assist you with the installation. We can also help with technical issues, strategic advisory, and transactional support.
Another area our experts can help with is regulations. Since they are constantly changing, it can be difficult to keep up with changes. We keep up with the latest developments for you so your company can comply with them and avoid being subject to any fines or sanctions.
We believe in providing hands-on services for our clients. You’re not just an account to us—you’re a person with questions that deserve answers and problems that need solutions. Your personal point of contact will learn about your business and your specific needs so we can give you the best service possible.
We don’t just tell you what to do—we’ll collaborate with you to understand your vision for your business and advise you accordingly. We want you to succeed and not become another failed statistic.
Our goal is to be with you on every step of your accounting journey, help you avoid outsourced accounting mistakes, and make the process as painless as we can.