Deciding When to Outsource Accounting for Efficient Small Business Accounting
Most small businesses do their own accounting when first starting out, but as they grow, so do their accounting needs. Some experts recommend outsourcing for businesses with more than 10 employees or that generate over $1 million in annual revenue. But we believe that can be a big mistake – especially for small businesses that don’t have easy access to additional capital should a financial issue arise.
Small business owners wear many hats, and keeping up with all the demands is a delicate balancing act. It often means that important tasks – like maintaining your books – take a back seat to more urgent matters. And, without the help of an experienced accounting professional, you could be missing out on financial opportunities or making costly financial mistakes.
It also means you must manage your time and resources efficiently. You can hire an in-house accountant or bookkeeper, but many small businesses and start-ups don’t have enough work to keep a full-time person busy. Outsourced accounting services enable you to benefit from the expertise of certified professionals without the hassle and expense of hiring and managing your own in-house team.
As a result, we recommend that small business owners outsource their accounting as soon as possible to ensure they are using accounting best practices, setting up processes that support their future growth, and keeping their books in order, so they are prepared when tax time arrives.
As your business grows, however, it’s increasingly important to have accurate financial records. Poorly kept books can hobble a business, from limiting the ability to plan for future growth to adversely affecting financial opportunities. Outsourcing your accounting can provide a cost-effective solution that allows you to maintain impeccable financial records without the expense of hiring staff.
Accounting Meister offers expert accounting assistance if you’re thinking about outsourcing your small business accounting. We provide accounting and bookkeeping services, as well as training and tutoring. Contact us to learn more about our accounting services, or to request a free consultation.
5 Tips To Determine If It’s Time To Outsource Accounting
How Much Time Are You Spending on Accounting?
When you’re deciding whether to outsource your accounting, it’s helpful to consider how much time you and other staff members are currently spending on accounting tasks. Shouldn’t you be focused on bringing in customers, hiring employees, and growing the business?
One of the pitfalls of being a small business owner is a tendency to personally complete tasks, from emptying the trash to handling A/P. Successful business owners learn to overcome this inclination and direct their time and attention to the areas where they can make the most difference. Outsourcing accounting functions frees up the time you’re spending on invoicing, payroll, and other financial tasks so you can focus on growing your business.
Additionally, when you outsource accounting functions to a professional, you’re working with someone who has a thorough knowledge of current regulations, tax law, and other guidelines around business finances. Untangling accounting errors can be time-consuming and costly. Working with a well-qualified accountant ensures you’re up-to-date on the latest requirements and regulations that may affect your business.
What Condition Are Your Financial Records In?
If you’re wondering if it’s time to outsource your accounting, you may want to test your current system. Can you find critical financial information quickly? Are you able to pull a P&L and other financial statements? Have you received complaints from employees about payroll errors?
Accurate, accessible financial records are vital for a business to function smoothly. Finding out bills are past due or that you’re lacking key documentation at tax time is embarrassing and potentially harmful to your business. In many cases, businesses grow so fast that the bookkeeping demands outpace the staff’s abilities and available resources, which can lead to accounting mistakes. Outsourcing these tasks to professionals is an excellent way to prevent confusion and errors due to incomplete or inaccurate financial records.
At Accounting Meister, we have years of experience helping small businesses and start-ups with their accounting needs. We can manage your books, or we can help you learn accounting skills and common accounting software. Contact us to learn about our services and how we can help.
How Fast Is Your Business Growing?
If your business is growing rapidly, adding new locations, or substantially expanding the number of employees, it may be beneficial to outsource your accounting. While bookkeeping may be simple during a business’s early days, that can change overnight during a period of accelerated growth.
Outsourcing your accounting department not only allows you and your team to keep your attention on your core business, but it also aids immeasurably in scaling growth. Accounting experts understand how to help a business navigate forward during periods of rapid expansion.
Rather than trying to figure out how to adapt your current accounting practices to a growing company, outsourcing your accounting will permit you to focus on leading your business and benefit from the expertise of accounting professionals who can ensure your accounting processes align with and support your business growth.
Do You Need Full-Time or Part-Time Help?
Before you move forward with outsourcing your accounting work, evaluate how much work you have available and what functions you want to outsource. For many small businesses, part-time help is fine until the business grows large enough to warrant full-time service. You may need only a few hours a week initially, but with a growing business, that number can rise quickly. Make sure the firm you’re considering working with can support more hours when the need arises.
Which Accounting Professional Is Best For Your Needs?
Accounting professionals can be certified public accountants (CPAs), and bookkeepers may be a certified public bookkeeper (CPB) or a certified bookkeeper (CB). If you need someone who can do your corporate taxes, you probably need a CPA, but if you want someone only to do A/R and A/P, a CPB or CB may work for you.
When you’re considering any accounting or bookkeeping professional, ask them about their experience and qualifications to handle the tasks you need to be completed. If you use Quickbooks® for small businesses, make sure the person or firm has experience with the software.
Accounting Meister is fully prepared to handle your outsourced accounting needs. Getting started with Accounting Meister’s outsourced accounting services is quick and easy. Schedule a free 15-minute consultation to learn more.