Out of the thousands of technology start-ups that launch each year, only a fraction hire a certified public accountant at the onset. Many believe that hiring a CPA Firm can be too expensive or downright unnecessary during their early stages, but that couldn't be further from the truth.
As an entrepreneur trying to grow your tech venture, the last thing you need on your plate is the bookkeeping, employee benefits planning, invoicing, payroll, tax preparation, and other finance-related jobs. You should be focused on things like R&D, marketing, and inventory management.
If you're launching a business in the technology industry, it's important to have your finances in order and hiring a CPA Firm to help with your technology business can do just that.
Below are five reasons to consider hiring a professional CPA Firm to help you grow your tech start-up. Your taxes will be done correctly Did you know that tech start-ups with less than $5 million in annual gross receipts can apply for a maximum $250,000 research and development credit to offset payroll tax liabilities?
New legislation was recently passed which makes this section 41 tax credit for R&D available to small and medium-sized businesses that were previously unable to exercise this credit. Staying up-to-date on new tax legislation and how it impacts new businesses is not something that an entrepreneur can juggle with their other daily duties. This wealth of knowledge is what makes an experienced CPA valuable to start-ups in the technology industry.
Not only is it important to know new credits and legislation that affects business taxes, but it's also important to have experience preparing and filing taxes. The techniques and information required of start-ups for tax filing can be complicated and convoluted for those inexperienced with tax forms. To help you rest assured that your tax return is properly filed, it's advised to use a CPA Firm that understands your industry and the nuances of write-offs and tax incentives available to your start-up. You’re more likely to get funded Start-ups in the tech space need seed money and investors in order to get off the ground, but in today's competitive market, those funds are harder to come by. CPA Firms provide a way for your new business to stand out from the crowd of money hungry start-ups by giving your venture credibility and legitimacy.
Investors will have more clarity of your earnings and peace-of-mind that your numbers are real when you have an unbiased CPA Firm in your corner. You’ll have a strategic growth plan Not only do CPA Firms give your business more credibility, they can also provide consulting and business reports to help you run a more efficient business.
When a company is first starting, rapid growth is the main goal, but too many start-ups burn out in the first couple of years.
However, if you hire a CPA Firm you can take advantage of their business consulting and strategic insight. Many CPAs are trained to not just collect and report numbers, but also to analyze the data and provide execution plans to optimize business operations.
By utilizing your financial resources efficiently and taking measured steps towards expansion, you can avoid the spending mistakes that your competitors will make, and set yourself up for sustainable growth. Your quality of life will be better Brand new start-ups typically run on a skeleton crew, maximizing each person’s time, energy, and creative vision to launch the enterprise. This type of business operations is typically known as bootstrapping and is a staple for many start-ups in the technology industry.
However, this thinking of resources to avoid expenses can lead to overfilled schedules, mental exhaustion, and poor quality of work. While you may be able to squeeze a few extra dollars on your short-term bottom line, you could be leaving huge gaps in efficiency that may result in lost revenue and long-term opportunities.
If you're not experienced with bookkeeping, tax planning, or other accounting tasks, don't sacrifice quality to save a few dollars. CPA Firms provide an incredible resource for financial insight and business planning, so let them do what they are trained to, while you work on growing your business and improving operations. You’ll always be in compliance CPA Firms offer much more to start-ups than just tax assistance. Professional CPAs are always learning and must keep up-to-date with all relevant city, county, and federal regulations for your industry. This expertise will ensure that your business is compliant with all licensing, tax, and other regulatory requirements. Many CPA Firms will even help you register your company and pick the appropriate entity designation.