If you own a business and are doing your own accounting then you are costing your company money. Too many owners think they are cutting costs but keeping accounting internal, but the price they are paying is actually higher than hiring an outsourced accounting department.
Professionalism & Proper Procedures
If accounting were nothing but addition and subtraction, then accountants would have elementary school educations. The profession isn’t just about keeping track of transactions. It’s about an entire theory of smart business practices that ensure financial records are current and complete.
It is common for business owners who do their own books to keep fiddling with previous months. They find a receipt in a drawer from three months ago or realize a debit was entered wrong so change it. The problem with this kind of ‘accounting’ means the company’s financial picture is always changing. Reports become less useful because nobody can be sure the report is complete.
Even many professional bookkeepers do this because they are not trained in accounting practices. This is one reason to hire an outsourced accounting department rather than a bookkeeper. They will bring needed discipline to financial operations.
Tax Laws & Tax Breaks
Nobody likes paying taxes but it’s worse when we don’t pay taxes or file them wrong. Very few business owners understand all of the tax laws as they apply to their businesses. Payroll tax, sales tax, unemployment tax, Social Security tax and more all have to be paid on time and correctly. As soon as you get things straight, the rules change.
Owners have more important things to do than pore over IRS regulations. An outsourced accounting department gives the business access to an expert who is familiar with the tax laws as they are today and as they change. They ensure all tax deadlines are met and reports are up to date so the correct amount can be paid.
Accountants often have insight into tax breaks that business owners may not be aware of. Some of these can amount to significant improvements to a company’s bottom line, well over what the outsourced accounting department costs.
Analysis & Advice
Professional accountants can provide a level of analysis of a company’s finances well beyond what a layman could. Reports can show patterns in revenues and expenditures that a superficial examination would not have revealed. With in-depth information, the owner can focus on strategic plans that will bring future prosperity.
An owner can ask the outsourced accounting department for advice. This can range from basic business practices that can cut expenses and increase revenue to evaluations of major expenditures. A business which is planning an expansion can work with the accounting to predict the viability of the project.
The value of outsourced accounting services is difficult to measure but almost always exceeds the cost of the operation.