As a business grows, its need for accounting support grows as well. A new, simple start-up company will focus primarily on compliance. Do they have all their licenses? Are they paying the correct amount taxes on time? How do I track non-employee contractors? These are all critical for a start-up to avoid fines, penalties, or delays in getting work done.
From an accounting perspective, new companies primarily need bookkeeping support. The business owner can do this, but rarely does a small start-up have an in-house accountant. Many companies use straightforward accounting software like QuickBooks or Peachtree. However, if the business owner is highly focused on customer acquisition and sales, then maybe hiring an outside bookkeeper makes sense. Bookkeepers are common and you should look for one that is certified with QuickBooks, or another well-known accounting package. Your bookkeeper should also be aware of how to process payroll, track sales and use taxes, and file required tax forms.
Additionally, while a CPA would be more than willing to prepare your Federal and State taxes, an early -stage company may be able to prepare tax returns on their own using software such as TurboTax. Also, you may be able to use an IRS enrolled agent (EA). An EA has passed the basic qualifications required by the IRS to prepare tax returns and can represent you if the IRS has questions. If your tax return is straight forward (no rental properties, complex investments, or alternative minimum tax) but you are concerned about doing them yourself, you will likely be able to get your return completed for a lower overall cost if you use an EA.
This is not to say that you shouldn’t find a certified public accountant (CPA) that can advise you during various stages of your growth. While a business owner may be able to handle many of the accounting activities internally, an experienced professional can help guide a business owner with the initial accounting system setup and new, or unusual, transactions. These transactions may include purchasing real property or large equipment, getting a small business loan, entering into a lease agreement, etc.
Suffice it to say, starting a business is hard work and requires that a business owner deal with areas that are likely outside their direct area of expertise. Keeping most of the work in-house can save money, but using an experienced CPA can make sure that a company stays compliant and develops efficient and effective internal accounting processes.