Accounting is an inevitable part of the business cycle. Without a quality accountant, you may quickly find yourself overwhelmed, paying more taxes than you need to, and even facing potential legal issues. Though correcting your books at the end of the year can often be a rather tedious, time-consuming task, there is no doubt that it is a task that needs to be taken quite seriously.
As time has gone on, many business owners have come to realize that instead of spending hours on end trying to manage their books themselves, they would be much better off by outsourcing their accounting responsibilities to someone who has more experience. Because proper accounting is something that is an absolute necessity, it only makes sense to take the time to find someone who knows exactly what they’re doing.
Outsourcing your accounting responsibilities to someone who is a specialist can provide your business with an incredibly wide array of benefits. Not only can you be comfortable and confident, knowing that your books were properly managed by an expert, but you will also find yourself having more time to commit to the portions of your business where your expertise is most highly valued. In this article, we will briefly discuss the many benefits of working with an outsourced accounting firm and also discuss the most important things for you to think about when considering your available options.
Expertise, Experience, and Knowledge of the Law
The most obvious reason that your business can benefit from outsourcing your accounting services is that, unless you are personally a certified public accountant (CPA), these specialty firms have a much better understanding of accounting systems and practices. Even though you may keep accurate financial records, it is unlikely that you will be able to manage your books with the level of expertise that a full-time accountant can.
Ultimately, assuming that you can handle all of your accounting tasks on your own puts you in a position where you are much more likely to commit errors, overpay, or miss payments. Accounting is a skill that takes a significant amount of time to properly perfect. Furthermore, business accounting requires a certain level of familiarity with the law. As the old saying goes, ignorance of the law is not a legal defense—if the Internal Revenue Service (IRS) discovers that your business didn’t pay the right amount of taxes or report the right amount of income, both you and your business may find yourselves in serious trouble.
The Ability to Save Money
Though most accounting firms do charge their clients a certain array of fees—they are operating businesses, after all—many businesses discover that even after paying these fees, they are still able to save a significant amount of money. This is largely due to the fact that there are a number of business-friendly tax credits and tax deductibles that only accounting experts are typically aware of.
Balancing your books is just as much of an art as it is a science. A good accountant will help you legally decrease your before-tax operating profits on paper in order to decrease your tax obligations. Furthermore, in addition to identifying areas where you can legally avoid taxes, an accounting expert will also be able to help you set up a more efficient inventory system, eliminate redundant expenses, create steady cash flow streams, and also save money in a wide variety of other ways.
Further Savings with Opportunity Costs
Beyond the large amounts of money that you stand to save by hiring an outsourced accountant, you will also be able to “save” even further in the form of opportunity costs. If you do choose to manage your books all on your own—which again, is probably unwise unless you have a very simple operation—this means that a significant portion of your time that could be directed elsewhere is being spent performing accounting tasks instead.
Most business owners and managers have a special area of expertise other than accounting. By directing as much of your time to the area of the business world where you can most productive as possible, your business will be able to continue to increase its bottom-line. This is just one of the many reasons that businesses that are able to specialize have been able to perpetually sustain a competitive advantage—both you and the accounting firm will be much better off in the long-run.
Access to the Best Accounting Technology
The best accounting software on the market can sometimes be rather expensive. Though it likely won’t make sense for you to invest in this technology on your own, firms that specialize in accounting will recognize the value of their investment and will likely purchase this technology in order to attract more customers. In other words, by working with someone who has already paid for the top accounting technology and software, you can save yourself the expense of having to purchase a single copy on your own.
Accounting software may include QuickBooks, TurboTax, or any number of other similar products. The top outsourced accounting firms will also have already built workbooks and spreadsheets that makes it easier for you to create future cash flow projections. These programs are often readily adaptable and can be modified to address your business’ specific set of needs.
Creating a Valuable Business Partnership
Lastly, making the decision to outsource your accounting responsibilities provides you the benefit of having a reliable partner you can access throughout the year. Even if you only plan on using your accountant to balance your books at the end of the year or to help you prepare for tax season, it is certainly quite valuable to have someone to answer your questions as they inevitably emerge throughout the ordinary course of business.
Suppose that you have an ambiguous invoice, a specific cash-flow issue, or a financial conflict with one of your employees. If you are unequipped to handle this situation on your own, you could go out and hire someone new, or you could reach out to someone that you are already comfortable working with. Even if you are simply talking to your accounting firm over the phone or online, it certainly helps to have someone trustworthy that’s readily available.
Things to Look for When Outsourcing Accounting Services
Once you have made the decision to outsource your accounting duties, you may find yourself overwhelmed with the number of choices that you have. After all, with roughly 1 million accountants living within the United States, you are certainly not without options.
Fortunately, there are a few key things you can keep in mind in order to find the firm that’s right for you.
- Look for someone who has experience working with firms of a similar size, or even of a similar business type
- Be sure to choose an accountant who will readily answer all of your questions
- Balance service costs with the type, depth, and breadth of services available
- Compare the websites of multiple different firms before making any final commitments
As long as accounting remains an essential part of the business cycle—which it seems that it always will—it is important that you take the time to make sure your books are handled correctly. Outsourcing your accounting services can help provide you with the savings, security, and level of expertise that you need to succeed.