What are the typical duties of an accountant for a software startup?
Apart from bookkeeping, what are the typical duties of an accountant for a small software based startup?
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As I mentioned in your other question, this is way too broad to be asked on an SE site. You are welcome to edit the question to narrow down the scope. – Zuly Gonzalez 12 years ago
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@Zuly Gonzalez I am unsure how to narrow the scope, can you give me a suggestion? – Lavinski 12 years ago
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Sure! The problem is that you are basically asking "tell me what I need to do to start my business". There's a huge list of things one would need to do, and we can't go over every single thing. What **exact** part of the process are you stuck on _right now_? Is it deciding which business structure to go with? Is it registering your business with the government? Is it finding customers? It sounds like you are just getting started, so you don't know the right questions to ask. And that's fine. I suggest you start with doing some Google searches to get a better understanding of what (cont.) – Zuly Gonzalez 12 years ago
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(cont.) steps are involved. If you read something that doesn't make sense to you, you can come here and ask a specific question about that step. You are free to ask as many questions as you want. So it's best to ask one focused question per post, so we can concentrate on addressing that one point in detail, instead of glossing over a bunch of things. – Zuly Gonzalez 12 years ago
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This question is better. I'll reopen. – Zuly Gonzalez 12 years ago
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@Zuly Gonzalez Ok Thanks, that helps, I'll see if I can fix up my original question a bit more. – Lavinski 12 years ago
3 Answers
There are a lot of combinations depending on whether you are hiring a bookkeeper or an accounant. Bookkeeper will only maintain your books based on business transactions. Their rates are lower than those of an accountant. A lot of them work remotely as well, so you are not limited to the nearby area. A bookkeeper can help with such items:
- Post transactions in accounting software.
- Work on collections / post cash receipts.
- Pay bills / post cash payments.
- Run payroll (escpecially it you outsource payroll to ADP or similar).
- File payroll reports with governmental entities.
- Prepare reports for internal use.
An accountant, on the other hand, will handle a broader range of tasks for you:
- All tasks that a bookkeeper can do.
- Set up a chart of accountants (bookkeeper can do this as well, but it's a good idea to reconcile with the accountant who will prepare your taxes to ensure all information is captured in the most appropriate way).
- Prepare quarterly, etc. tax returns.
- Run payroll (especially if it's in-house).
- Prepare budgets, budget to actual, etc.
- Assist with financing decisions.
- Perform tax planning and compliance.
If you decide to hire a bookkeeper, I strongly recommend engaging a (tax) accountant at the same time to do initial planning, etc. so that when the time comes to file your taxes, you have all information for the accountant. If you hire a good accountant, he or she should be able to handle all mentioned tasks.
I would not advise you to pay an accountant to do your bookkeeping. You should hire a bookkeeper to do your bookkeeping. An accountant's hourly rate is much higher than a bookkeeper's hourly rate, and bookkeeping is a fairly straightforward thing, so it's not one of those things you benefit from paying extra for.
Some accountants will have bookkeepers on staff, which makes it easy. When you interview an accountant ask her about this. Related: What questions should I ask when interviewing a potential accountant? Now, to your question:
what are the typical duties of an accountant for a small software based startup?The things an accountant will handle for a small software startup are pretty much the same as for other companies, just at a smaller scale. These include:
- Setting up your books and creating your Chart of Accounts. (This allows a bookkeeper to easily handle the data entry.) Related: Building an Effective "Chart of Accounts"
- Closing out your books at the end of the year.
- Filing your tax returns.
- Quarterly taxes.
- Payroll.
- Provide you with guidance on which business structure may work best for you, how to properly register your business with your government, and many other "just getting started" type of tax advice.
- Advise you on tax laws, if for some reason it is important for you to know.
- Help you with strategic financial and tax decisions.
- Suggest ways you can legally lower your tax burden.
They also work out your tax owed, run your payroll (even if its just for yourself) and advise you on whatever tax benefits/charges you may incur during the running of your business.
