The end of the year is a great time to review your accounting practices. You might want to make changes before the new fiscal year or tax year starts. You might also just have more time available as business slows for the holidays. Here are some of the ways you can benefit from outsourced accounting services.
Virtual Accounting Is More Than a CPA
Many smaller businesses only have a CPA that handles their tax return. They might hand over a spreadsheet and a box of receipts and then the CPA does all the work. The CPA will often provide some tips on how to lower next year’s tax bill, but then it’s goodbye until next year.
Good CPAs are valuable to any business, but they only handle part of your accounting needs. Business owners and executives need to know the state of their finances at all times. With outsourced accounting services, your data is kept up to date in real-time. When you need to make a decision, you can get the information you need now instead of waiting.
Reduce the Risk of Staying In House
Keeping your accounting internal has risks that you don’t have with virtual accounting. Smaller businesses may only have enough work for one accountant. Even if they’re the best accountant ever, that makes them even harder to replace and creates more disruptions to business operations if they leave the role.
Small accounting teams also go against basic accounting principles. Good internal controls require that accounting tasks are separated between multiple people. Having a single person handle multiple tasks increases the risk of error or even fraud.
Outsourced accounting services provide a full team that properly separates duties while providing ongoing continuity even if one person moves on.
Having an internal accounting team usually costs more. Many businesses hire full-time accountants but don’t have enough work to keep them fully utilized. This might be due to seasonal variations in work or because they can’t attract the right talent with only a part-time role.
There are also overhead costs to having internal accountants. They need somewhere to work, computers and other supplies. In businesses with a small number of total employees, adding one or more accountants could also force changes or major cost increases to retirement or other benefit plans.
With virtual accounting, you only pay for the services that you use. If you need a specialist for just a few hours per week or month, you get someone with direct expertise in that role without having to pay them for idle time. Since your accounting team is offsite, you also skip all of the associated overhead costs.
Get Access to More Technology
When you use outsourced accounting services, you also gain access to a full range of cloud accounting products. This accounting software is often included with the service or comes at a far lower cost than you can get as an individual business buying licenses for a small number of accountants.
In addition, you don’t need to worry about whether you have the same technology as your external CPA, what happens if you don’t and if switching your technology to match your CPA is worth the time and expense of making the switch.
Gain More Expertise
Saying all accountants are the same is the same as saying a furniture manufacturer is the same as a computer manufacturer. People in a broad general field might look similar to outsiders and have transferable skills, but they don’t all have the same expertise.
Accountants often specialize in different areas such as taxes, financial statements, payroll, inventory, cost accounting, DCAA compliance, and more. Generalists may lack experience or expertise in specific areas, just like there are medical doctors and specialist surgeons. Small accounting teams are forced to choose what expertise they value the most while knowing that they’re making compromises in hiring.
Virtual accounting provides a full accounting team just like the largest companies have. There are accountants of every skill set and experience level, meaning that they always have the right person for the job.
Make Better Business Decisions
Perhaps the number one benefit of virtual accounting is the ability to make better decisions. Experienced owners and managers are expected to make judgment calls, but not every call should be based on judgment.
When a business sees its profits going down, it may have meetings to discuss changes. Often, the team might come to a consensus decision like increasing marketing spending without ever reviewing the data. Usually, this is because no one has the data.
Outsourced accounting services provide constant access to cloud data and the ability to quickly request advanced reports. This can give decision-makers key information like the return on different types of marketing spending, which products are most profitable, or which specific expenses have been reducing margins.
Explore Virtual Accounting
AccountingDepartment.com provides 100 percent U.S.-based outsourced accounting, bookkeeping, controller, and advisory services. Contact us now to learn more about how we can assist with your accounting and bookkeeping needs.