How much does it cost to hire an accountant for a small business?

Even in your average small business (1-3 employees, less than $500k turnover) there will be a broad range of options for accounting and finance including getting specialise setup, tax structuring advice, finance systems and processes together with the everyday bookkeeping and accounting functions.

Is an accountant needed for a small business?

An accountant can offer comprehensive startup and ongoing small business advice, while making sure tax compliance is prepared and filed with the relevant authorities on time.

What is the role of an accountant in a small business?

Being a business owner can be a tough job, and it’s good to have a trusted advisor to lean on in times of complexity or uncertainty. An accountant will be able to help you navigate your business through these times, and help keep compliant with relevant tax authorities.

Xero is an integrated accounting platform that can complete all small business invoicing, receipts, bank transactions and reporting for the IRD. Being cloud based means your advisers can have access to your information in real time.

Is Xero Accounting any good?

Xero is a great tool for small businesses as it gives you real time access to the financial data of your business - information we couldn’t imagine being in business without.

Should Your Startup Have an ESOP?

In the fight for really good employees, it’s getting harder and harder to compete. Startups do have a secret weapon though when competing for talent with big businesses - an Employee Share Scheme (ESOP). More startups are implementing Employee Share Schemes to attract and reward talented staff.

What is an ESOP?

An ESOP is a plan to grant partial ownership of the startup to current or prospective staff. The schemes themselves can be really simple, or really really complex, and while there is no off the shelf package, the range we see usually fall within a few categories:

Employees purchase shares outright
Employees are granted share options
Shares are held on trust for the employees until a liquidity event
Employees are granted partially paid shares

Why have an ESOP?

An ESOP gives employees ownership of the startup, which can lead to higher performance and greater buy in for company decisions. It can also lead to greater retention of staff as they are owners of the shares, and want to contribute to improving the company’s value.

What are the tax consequences?

All these categories above have different tax and management consequences so please discuss with your advisor prior to beginning the process of establishing an ESOP. Shares or options can be transferred at market value, discounted or no cost, all of which have different tax consequences.

What are the business consequences?

There are also other business issues to consider, and its useful to do some scenario planning with your finance professional to determine what will happen in the following circumstances:

If an employee leaves
If the company sells out
If the employee has to pay tax
If the company goes into liquidation

Regarding complexity, you’ll also want to consider the cost of establishing such a scheme with the benefits. You could easily chew up the legal fees on a complex system, money that may be better spent elsewhere in your startup.

Overall we think an ESOP can be a really good alternative for startups and growth firms to compete in the fight for talent.

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