Eight Reasons Why You Should Outsource Your Accounting
Some small business owners consider having an internal team to manage their finances or, in some cases, manage it themselves. This might be suitable for some, but most businesses could really benefit from outsourcing their accounting to a specialist.
There are numerous reasons why outsourcing your financial management makes business sense, here are eight.
1. You Can Concentrate On What You Are Good At
Unless you have experience and training as an accountant, you are unlikely to have the best accounting skills. You are, however, an expert in your own industry.
Therefore, if activities like accounting are outsourced you will free up more of your time to concentrate on the tasks you are great at. This can lead to great productivity and better quality of work.
2. Lower Employee Costs
When you outsource your accounting operations, you can save up to 40% of the costs compared to the cost of an employee because you don’t have to pay for any benefit packages, training or equipment, and your insurance could be lower.
The cost to hire a new employee can be as high as 150% of their annual salary. So, by outsourcing you could really be saving money.
The less it costs you to recruit and run your accounting operations, the more funds you can reinvest into the business or the more profits you can take home.
3. Reduce Fraud
Employee fraud is a massive problem, and it is unlikely any business with employees is completely immune from some sort of theft.
We’ve covered before how employee related theft can affect your business, but those statistics didn’t cover fraud in general.
Statistics highlight that companies with fewer than 100 employees are most vulnerable to fraud and face an average yearly loss of $155,000. Outsourcing your accounting can be a way to detect fraud within a business.
4. Lower Tax Burden
Accountants have intimate knowledge of their profession and know all the tax codes relevant to your business.
They take the time to understand new tax laws and where they might be applicable and recognize how their clients can benefit from changes in state and national tax.
This can mean that you are able to make more money, which can be used as a reward for your efforts or be reinvested back into the business.
At the same, all of this is done for you by someone else, so you aren’t rushing around during tax season. Instead, you can just concentrate on your business and provide a great service to your customers.
5. Scalability And Flexibility
When you have an in-house team, scalability becomes a big challenge. If you suddenly grow and need a greater workforce within your accounting department, it can take up to 26 days to hire a new employee.
This does not include the time which might be needed for the new hire to hand in their notice and work through any notice period. If we include this, the wait time for any new hire could be up to 57 days.
In addition, a new hire needs time to settle within your organization and it could take them six months to reach their full potential.
Until then, your business and your accounting team specifically, might suffer. In addition, if the sudden increase in demand reverses, you will have too many staff and could face extra costs in maintaining the in-house accounting team or alternatively, in paying redundancy.
In contrast, outsourced accountants have a team ready employed that can increase or decrease the resources allocated to a client. There may be a waiting period for any changes, which should clearly be stated in any contracts you sign with an outsourced accountancy team.
6. Access To Top Software
Choosing what software is best for your business can be really difficult. There are numerous options and to the uninitiated they can all look the same.
When you outsource your accounting duties to a professional firm, you can benefit from the accounting software they have chosen based on their experience.
This prevents you wasting your time and money trailing packages which don’t offer you the accounting coverage you need.
It also means you don’t have to learn how to use a new piece of software or end up making mistakes in financial entry because you don’t know the system.
7. They Can Offer Invaluable Advice
When you are looking to expand your business or seeking investment opportunities, an experienced financial expert can be a great support in your decision making.
They will have knowledge of similar scenarios and might have invaluable information for you to consider, which might help you avoid unreliable investment and reduce the cost of those that are suitable.
Their advice is usually impartial, which employees might not be. Of course, just keep in mind that an outsourced accountant is not going to be as excited as you are about any projects you are considering.
8. Peace Of Mind
A qualified and experienced accountant can provide you and your leadership team with peace of mind.
You know your financial management is being handled by the right people and when you turn up for meetings, you can be assured that the financial information will be accurate and presented in a way that everyone understands.
Finally, you know that when you bid on government contracts – you have the required financial management in place to comply with any regulations or restrictions they place upon you.
Having this before the bidding will also put you in good stead during the application process and place you above those competitors who have not thought about this yet.
A qualified outsourced accountant is one of the best investments for your business. They offer cost savings, quality of information and protection for your business.
These benefits can help you concentrate on activities that are more suited to your skill set.
Do you outsource your accounting operations? What is preventing you from outsourcing your accounting functions?
Let us know in the comments below or contact a member of the Sovran Accounting Team to discuss your options.
Choosing the right accountant for your small business can mean the difference between success and failure. After all, it's your financial numbers that make or break your business.
Choosing an accountant? Be careful. There may be more riding on the decision than you think.
Unfortunately, once you've selected an accountant, it's a pain to switch. Your accountant gains detailed knowledge of you, your business and your data -it makes it very tough to transition to a new accountant. The end result is that many businesses that work with mediocre accountants don't make the change to a better accountant simply because the switching costs are too high.
Given the inertia that settles in after you've selected an accountant, it's important to make a good choice the first go-around. Makes sense, right?
Surprisingly, most business owners don't thoroughly consider their needs when selecting an accountant. That's because many of us who don't have a strong accounting background view all accountants as being equal.
But the reality is that all small business accountants are not created equal.
This article explains how accountants can assist your business and provides useful questions you should use to choose an accountant that truly can help your business grow, not somebody who just crunches the numbers.
What Do Small Business Accountants Do Anyway?
The increasing role of small business in the American business landscape and more powerful and accessible information technology has changed the role and importance of the small business accountant.
Why do you need an accountant? Some small businesses make due with a bookkeeper - someone to perform the tedious task of recording financial information and cranking that data into the necessary formats, like P&L statements and tax forms.
But a good small business accountant does much more than just record transactions and passively generate documents-they actively analyze, interpret and convert that data into actionable business intelligence.
Based on where you want to go with your business, they should be able to tell you how to get there. If your accountant is just showing you the financial tracks of where you have been, you've made a bad choice and you're missing out on a great opportunity to receive good business advice.
To be sure, today's small business accountant offers more than crunched numbers. They can be your primary resource for:
Running a business whether large or small requires a lot of dedication and hard work. And with the competition that companies, no matter what the size, need to deal with today, staying abreast and making a profit can be quite a task. Therefore a smart business owner makes sure that everything is systematic and well organized, in order to ensure that the business runs smoothly and at the same time profitably.
What is Bookkeeping?
Bookkeeping is an important aspect of running a business that should not be undermined. Bookkeeping basically implies the process of keeping full, accurate, up-to-date business records. A new business owner might wonder why this is required. There are a number of reasons that make this an imperative aspect of running a business. Systematic bookkeeping can help business owners in effectively managing the cash flow while keeping a proper tab on it. This further helps them to ensure profits and at the same time helps in minimizing losses. Also with proper records in place, taking financial decisions and predicting trends can be a lot more realistic and accurate.
Other than the fact that maintaining proper records is beneficial for the organization itself, in the United States , the Internal Revenue Service also requires business owners to keep financial records that are complete and up-to-date. So as a result, there is no way that a business owner can ignore this aspect.
Bookkeeping also serves the purpose of calculating the tax that a company has to pay. At times a tax agency might want to investigate the records of a company to ensure that the tax computation is accurate. As a result, once again there is a need to ensure that the records are accurate, complete and also up to date.
The Best Method of Bookkeeping
Bookkeeping involves making a record of the money that has come into the business as well as the money that has gone out of it. It also includes making a record of all outstanding payments that need to be cleared or collected. The whole process of bookkeeping can be rather strenuous as well as time consuming. It involves utilizing a lot of man hours that can be used for other more productive tasks if not employed in bookkeeping. Yet, since this is important too, therefore this task cannot be ignored.
There are numerous organizations that offer Bookkeeping services for businesses of all sizes, but what is imperative is to find and organization that customizes the Bookkeeping services according to the requirements of your business.
Leaving it to Sovran Accounting Services
With Sovran Accounting Services, you can rest assured that your bookkeeping requirements will be taken care of in the best possible manner. Officials at Sovran Accounting Services are well trained and qualified to offer Bookkeeping services for businesses of all kinds and also of all sizes. They understand the importance of maintaining records properly and therefore put in extra effort to do so. Further, they also make it a point to work hand in hand with the organization so that they understand the business, the owners and the employees and maintain records in a manner that can be truly beneficial to the business. Looking at the situation from the point of view of a business owner, working with Sovran Accounting Services would definitely be a win-win situation. Most importantly because this would help in saving precious man hours that with the assistance from Sovran Accounting Group can be utilized more fruitfully. Also since the officials at Sovran Accounting Services are well trained to carry out Bookkeeping services, the business owner can rest assured that the records would be maintained systematically and also accurately. As a result the business owner can concentrate on other aspects of the business that require his or her attention.
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