Congrats, you’ve started a business! Time to get make sure your bookkeeping and accounting needs are taken care of. Sure you can do it yourself, but consider these 5 factors for outsourcing accounting services.
“Do what you do best and outsource the rest.” – Peter Drucker
As a business owner myself, I have learned that this famous quote by Peter Drucker resonates throughout many aspects of business ownership. I can keep a mean set of books and go beastmode on a tax return, but learned that I am not an IT guru. Recently I spent hours trying to fix a computer issue. These were hours wasted where I could or should have been focused on business activities only I could perform. So if you’re in construction, productivity is being wasted trying to get the bank accounts to reconcile in an accounting software you’re not comfortable with while you could be out in the field completing a job and earning income.
Paying upfront can be cheaper than fixing on the backend.
Back to my attempt at trying to be an IT gal. By the time I ended up calling a professional to solve the problem I had created an even bigger mess. What could have been resolved in a minutes had we called Josh, the real IT Guru in the beginning, ended up taking a few hours. When paying for services by the hour, the cost benefit of having it done right from the start can be substantial. I have seen many business owners come in at tax time with their DIY accounting in hand. The bill is significantly higher than those who have a professional, whether in-house or outsourced, taking care of the bookkeeping and accounting services.
Keeping tabs on the ever changing laws.
The majority of small business books are kept with two thoughts in mind: 1) Am I making money and 2) Will I have to pay taxes? I’m going to focus on #2 – taxes. Do you know how your financial activities are affecting your tax liability? Do you know how your transactions are treated for tax purposes? Are you up to date with the latest tax law changes? Having someone I on your team whose job is to keep up with this knowledge That’s and consult with you regularly will help you make better business decisions throughout the year. Going talk to your tax advisor in the last week of December will not have a retroactive impact on that non-deductible high dollar purchase you made in June that you were sure at the time was your ticket to a tax free year.
A professional perspective.
A good accountant will provide you with more than a balanced set of books and a shiny printout of your monthly financial statements. You should be receiving insight and analysis based on all those numbers. Is the turnover too slow on your receivables? Are your operating cost increasing, but your rates are not? If you know how to interpret your financial statements then I certainly applaud you. If not, being able to have someone provide you with such information is a key factor in growing your business.
And save some more money.
Often new and small businesses don’t need a full-time in house bookkeeper or accountant Web Site.
- Saving on payroll taxes – Outsourcing the accounting function means who you hire is not your employee. No employee, no payroll taxes related to them. Also, this can reduce workers’ compensation and general liability policies, especially if all activities are done remotely or offsite.
- Cost of software – A good business needs good software. (Tracking activity solely in Excel is a no-no.) Many professional accountants can offer discounts on software and business applications. As a QuickBooks ProAdvisor I frequently recommend a version of QuickBooks to my clients, if all other factors considered are neutral, because I can get the best price through my discount.
By no means do I encourage business owners separating themselves from the money side of business management, but knowing limits and delegating responsibilities provides room for growth.