The Benefits of Outsourcing Accounting
How often are you completing the bookkeeping for your business? Maybe it’s weekly or monthly or are you like many other business owners that push this task off until the tax return is due? The accounting function is a vital component of running a successful and profitable business, yet many business owners neglect to complete tasks regularly.
This can lead to unfavorable tax situations, lower profitability, and minimal insight into the financial health of your business. One solution to enjoy all the benefits of regular accounting with none of the time restrictions is to pass the burden to an outsourced accountant. There are various benefits associated with enlisting expert help, from innovative insight to attainable growth strategies, making it important to consider if this is the right solution for your business.
Saves You Time
One of the top benefits of outsourcing your accounting is the time it can save you. Instead of spending time entering transactions and checking reports for accuracy, you can focus your attention on other valuable tasks, such as opening new revenue streams or attracting more customers. What would you do with extra hours in your week?
Outsourced accountants specialize in helping business owners with the management of financials and accounting records. This gives them insight into areas of operations that your business needs. Maybe your accountant finds that you can save money on your tax bill by switching accounting methods or that you aren’t properly categorizing expenses. Whatever the case, working with an outsourced accountant gives you access to an array of expertise and knowledge that allows your business to reach its full potential.
Gives Expert Insight
Most outsourced accountants also double as consultants. This gives you the ability to turn to a trusted expert when questions arise. Moreover, since your accountant will already have background information on your company from completing regular bookkeeping, you won’t have to wait days or weeks for answers.
Contrary to what you may think, working with an outsourced accountant is cost-effective. Your time is valuable. Spending a few hours a week or month takes away from other value-added tasks. By paying a fee to outsource your accounting, you can maximize your time and efficiency. In addition, outsourced accountants often provide you with the tools needed to properly budget and increase profitability. Additionally, when you outsource, you won’t need to hire an in-house employee, saving you on wages and payroll taxes.
If you’re like most business owners, one of your top goals is to grow the business. Strong bookkeeping and accounting controls promote growth through transparency into operations and the ability to set short-term and long-term goals. After all, your accounting system tells you how your business is doing. By having accurate financial statements created regularly, you can make informed business decisions based on real-time data.
Improves Cash Flow Management
Cash flow management is one of the top downfalls of small businesses. Cash flow controls the money flowing in and out of your company. Ideally, you always want to have a positive cash flow, which indicates you are bringing in more money than you are spending. Improving effective cash flow management relies on having bank reconciliation completed regularly. This will give you insight into the true balance in the checking account to determine how to spend your money.
Maybe you find that you are running low on cash, so you wait until the last day to pay vendor invoices and reach out to customers to speed up receivables. On the other hand, if you have excess cash, maybe you buy that new piece of equipment you’ve been needing. Managing your cash balance can help you keep operations running smoothly without defaulting on any payments.
Leads to Timely Remittances
Tax time comes quickly for business owners. Not only do business owners have to worry about filing the annual business returns, but here are also deadlines at the end of January that your business must abide by. Without having an updated accounting system, you risk missing these important deadlines and paying fines and penalties. For example, the penalty for missing the issuance of 1099s can go up to $280 per missed form. Working with an outsourced accountant can also help you understand what you need to know about tax prep.
Choosing the Right Professional
Choosing the right outsourced accountant is a major decision. If you want to find a professional that has the expertise and experience in your industry to give your business the best chance of realizing all of the benefits. First, evaluate their education. Most accountants will have some type of formal education, such as a college degree. Then, look at their experience. Education can be great, but real-life application often holds more importance. Looking at their past portfolio of clients can help you determine if they are the right fit for your business.
Most accountants hold credentials, such as a bookkeeping certification or CPA license. Ask your prospective bookkeeper about any credentials they retain. Furthermore, understanding the availability of the outsourced accountant is important. Are you looking for monthly bookkeeping or something more sporadic, such as quarterly or annually? Accountants are in high demand, meaning not all accountants will have the availability to work with your business.
Analyzing past customer experiences through reviews is another major factor to consider. Did past clients have a positive experience or were there issues throughout the process? Reviews are a transparent insight into the type of service you can expect to receive. Finally, look at communication methods. Does the accountant only work remotely or are they local? Most bookkeepers are moving to online services with the cloud, which decreases costs associated with travel time.
The benefits of outsourcing your accounting function are tremendous, from saving you time to giving your business the tools needed to grow and increase cash flow management. Finding the right bookkeeper is equally as important, which is why working with our team at Bookkeepme might be the right decision for your business. Reach out today to set up a consultation and talk over your situation.