What Every Entrepreneur Needs to Know About Accounting and Legal Services
Every entrepreneur looking forward to starting a business cannot avoid the services of accountants and attorneys. Whether the business starts abroad or at home, there are certain aspects that only accountants and lawyers can handle. Therefore, it is imperative for entrepreneurs to know what to expect as far as accounting and legal services are concerned. Below are some of the things you should know when considering working with lawyers and accountants in starting your business:
There Are Different Types of Accountancy and Legal Services
Though you are starting a business doesn’t imply that you will have to use every legal and accountancy service. Depending on the nature of your business, area of jurisdiction and the level at which your business is at (whether established or just starting up). You may require just specific types of legal and accountancy services. These you ought to identify in good time before you start searching for accounting and legal services providers. For example:
- You may need an accountant to help you decide which type of business to form, e.g. a partnership, company or sole proprietorship.
- You may need an attorney for due diligence and company formation
- Accountants may also help in preparing or reviewing your business plans
- A lawyer may be necessary to help you ensure compliance
- Lawyers and accountants bill their time/services differently
The lawyers and accountants charge rates vary considerably depending on a number of factors. These may include the nature of the services you need, their qualifications, experience, the firm you are dealing with and the urgency of the services you need. For most entrepreneurs dealing with startups, the hourly rates may vary anywhere from $250 – $850. Therefore, invest some time to do research so that you have a good comprehension of the rates to expect, depending on the services you need.
The Cost of Incorporating Startups Vary
You should also know that the rates of incorporating startups vary based on the complexity of the business. It varies on the type of business, the number of directors, amount of due diligence, nature of compliance requirements from the relevant statutory bodies etc. These should be considered in addition to the accounting and legal services fees. So you have the figure you can use as a guide into knowing what will cost you to get the business started.
When to Use Legal and Accounting Services
It is important for every entrepreneur to know that legal and accounting services should be secured at the very beginning of company formation. It may be tempting to go through the entire process of your own so that you don’t have to pay fees to accountants and lawyers, but this is never a good idea because there are so many things that could go wrong, especially if you are starting the business in a foreign country. Again, you should not wait for things to start going south before you can engage the services of lawyers and accountants. By having them at the very beginning, you will have a chance to start your business on the right footing. Also, you will avoid a lot of pitfalls you might have fallen into due to various omissions and commissions as a result of your ignorance on laws and business procedures.
You Can a Firm or Work With Individuals
Entrepreneurs have the choice of working with individual professionals or firms when seeking accounting and legal services. There are instances when working with an individual lawyer or an accountant will be more appropriate compared to working with a firm. For example, you are limited with funds when you are just starting out on a sole proprietorship. It will be easier and more affordable to hire a single accountant or lawyer than to approach an agency. But if you are keen on starting a business abroad, and you have the budget, you can always go for firms due to the varied services that you may require. In agencies, you will find professionals specializing in various fields, and who will be in a position to give you very good results.
Always Ask for Referrals
It is imperative that you do some due diligence on your providers and determines beforehand that they have what it takes to get the job done. Also, you will be in good hands and you will get a good experience by working with them. The best way to do this when you need an accounting and legal services is to simply ask for referrals. It helps you to dig deeper and see what awaits you. You can also check their reviews and ratings online. It is for you to have an idea about their client’s experiences. It will help you to decide whether or not to proceed with their services.
Know What to Prioritize if You Are on a Small Budget
If you are an entrepreneur pressed for finances, then you should be very strategic with the kinds of legal and accounting services you’ll get. Not all of them may be necessary. Here are some of the things you may want to prioritize under such circumstances:
- Establish the business entity, i.e. an LLC, partnership or sole proprietorship
- Get the ownership and equity rights in case of multiple owners
- Protect the intellectual property rights of the company
- Ensure tax compliance with all the necessary regulations
Learn to Identify Red Flags in Accountants and Lawyers
Sad stories have been said about how entrepreneurs were messed up by the accounting and legal services they had hired. You don’t want to add to such statistics and you should, therefore, know how to identify rogue accountants and lawyers so that you don’t waste your time and money on them. Watch out for obvious red flags such as working with professionals who can’t prove their expertise or give referrals, professionals who don’t understand the nature of your business, those who demand all the payment upfront, those with bad reviews, and those who surprise you with extra costs amongst other things.