The early years for any startup is the most crucial phase. They don’t have a strong background at such an early phase, plus they need to compete with the already established companies and other startups. Also, they need to create a niche in this highly competitive and ever changing environment.
It has been observed that the startups basically focus on the core activities like production and marketing but tend to miss out on the others like finance and accounting. This can cause a lot of harm and can also hinder the growth of the organisation. So proper emphasis should be there on the accounting part.
Here are some of the reasons why finance and accounting services are important for a startup –
- Planning and forecasting
Finance is the lifeblood of a business. A business needs to plan in advance regarding their finances in order to avoid any problems in the future. So accounting helps the business in determining and making a plan of the monthly expenditures, forecasts, and the projected growth of the company. It also helps in giving a reliable financial projection of the company to the investors, which helps in raising the funds.
- Determining the profit and loss
Accounting helps in monitoring the progress of the company and also in determining the profit and loss. It helps in determining which assets are generating profit and also keeps an eye on the liabilities part. This will help in understanding how your business is performing financially and also where it stands in comparison to the other business in the industry.
Accounting also helps in preparing the budget for the company. It helps in deciding how much to spend on what? e.g advertising, purchasing of inventory, or other expenses. In short, it helps in maintaining a record of the inflow and outflow of cash. Most importantly it helps in eliminating the unnecessary expenses.
- Tax planning
It is mandatory for every business to pay taxes either in the form of direct tax or indirect tax like GST. So to file GST you need accurate information regarding the sales, purchases, expenses etc. This is where accounting comes into the picture. It helps in detailed analysis of the financial transactions that in turn helps in tax planning. So accounting can help the startups in knowing their exact tax liability and avoid unwanted penalties.
- Better overview
Accounting helps in giving the overall view about the business from time to time. You can also get a clear picture regarding how your business is performing and its growth process.
- Better decision making
A proper analysis about the sales, profit, purchase etc. helps in getting a clear picture about the business. It helps in analysing the data quickly and then taking a decision. A business which is aware about its financial position can quickly respond to the market changes.
Looking for best accounting services? Hire experts!
Well, even though startups can handle almost all the aspects, it can be tiresome. So they look for experts in a particular field to provide them relevant and best solutions.
BFAG (Boston Financial Advisory Group) provides the best financial and accounting services that can help you to make better decisions and maximize your growth and performance.
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Visit our website: www.bostonfagroup.com