Does this sound familiar? You think doing everything yourself saves you money. You’re building your business from scratch so you want to have a hand in everything.
Accounting is one area where you may not want to take the DIY approach. The pros of outsourcing your accounting often outweigh the cost to hire someone to crunch the numbers.
Small business accounting not only helps you complete payroll and prepare for tax season. It can also improve your cash flow, help you forecast your finances, and maintain your overall financial health.
If you’re on the fence about outsourcing your accounting, read these benefits of hiring a pro.
Expert Accounting Knowledge
Can you explain accruals, depreciation, bad debt expense, and trial balances? Those are just a few of the common small business accounting terms you need to know. You may have a general idea of what they mean, but fully understanding them is different.
Having access to expert knowledge is one reason why outsourcing is good. You can vet your accounting pros to ensure they have expert-level knowledge of small business accounting.
Going straight to a pro eliminates the need for you to study up on accounting. You should still have a general idea of what goes into small business bookkeeping, but you can trust your accounting pro to handle the calculations.
Small business budgets have lots of expenses pulling from them. The last thing you want to spend money on is high-end accounting software.
When you outsource your accounting, the person you hire already has access to that software. You get the latest technology to ensure accurate numbers without having to invest in it yourself. Accounting companies constantly update their software and technology to stay current, so you always have access.
Are you making common bookkeeping mistakes by handling the numbers yourself? From incorrect categorization to data entry errors, those little mistakes can cause significant inaccuracies in your books.
Accounting professionals already have a background in the field to handle the work accurately. They’re aware of the common pitfalls and mistakes, so they can avoid them in your books.
Accuracy is crucial for your own records, but it’s also critical for payroll and taxes. Mistakes in your payroll create headaches for your employees, who rely on their pay to be accurate and timely. A mistake in your taxes can result in penalties and late payments.
The basics of math don’t change, but the best practices in accounting to fluctuate. Even if you teach yourself the basics of small business accounting, those skills may become outdated quickly. You’ll need to constantly learn more accounting practices.
Outsourcing to an accountant eliminates that extra work for you. Your accountant should stay current in best practices and use those practices in your accounting.
Decreased Chance of Fraud
If you have one of your employees handle the accounting work, you open yourself up to fraud. You don’t want to think about any of your employees stealing from you, but it happens more often than you think. Small businesses average a loss of 5% of gross revenue to fraud.
When only one person handles the books, you miss out on the checks and balances that can stop fraud. Having a professional accounting service handle the books eliminates that internal fraud. Even though you pay for the accounting services, you can save money by preventing the fraud loss.
More Time for Core Activities
Do you feel like you’re always handling accounting and other administrative tasks? Those operational tasks are necessary, but they pull you away from the core activities of your business. Those care tasks are where your expertise lies, and they’re how you grow your business and generate more income.
Even if you’re strong at math, doing the accounting likely takes you longer than it would a professional accountant because it’s not your everyday job. You may have to stop and research different things. Reviewing your work might take longer.
That extra accounting time keeps you from your core business activities. When you free up that time, you can do more to expand your business. You can generate more leads or perfect your products and services to increase business.
Being able to focus on those areas of expertise also makes your job more enjoyable. You didn’t start your business so you could be a part-time accountant. You started it so you could be a leader in your industry.
When you spend more time on your core business activities, you get more satisfaction out of the work. You might even cut down on feeling burnt out on those mundane tasks.
Hiring an internal accountant is a solution to doing the bookkeeping yourself, but it comes with its own set of challenges. If you hire a full-time accountant, you have to pay the salary even if you don’t have a large enough accounting workload to keep that person busy. You also have the expense of benefits.
Outsourcing your accounting work means you’re only paying for the work that gets done. If you just need a little help with payroll or taxes, you only pay for the time it takes to handle those tasks. Since accountants are knowledgeable about those topics, they can handle the work quickly.
You’re paying for the accounting service, but you may actually save money over hiring an internal employee to do the work.
As you grow, so does the complexity of your bookkeeping, taxes, payroll, and other accounting duties. Are your current accounting staff members capable of handling those more complex situations?
Growing businesses often need to add to their accounting teams to handle the increased workload. Hiring takes time. One study shows that only 30% of companies complete the hiring process in 30 days or less, while 50% take 1 to 2 months.
Embrace the Pros of Outsourcing Accounting
The pros of outsourcing accounting benefit businesses of all sizes. The peace of mind you get from having a professional take that task off your plate can help you become more productive on your other tasks.
Are you ready to hand over your accounting duties? Schedule an appointment with us to get started.