Everyone running a business knows the value and necessity of keeping accurate accounting records. The question is how you keep those records. Many business owners try to go it alone and handle it with one of the various software programs on the market. But if you have little to no experience in accounting, how will you set up your general ledger and the other schedules in the software? The person setting up the software will need an understanding of what the software is asking them to create and generally accepted accounting principles. As with all things, you get out what you put in. Putting in bad data in a poorly or incorrectly constructed accounting system is not the way to run your business.
What do you do if you can’t afford to hire a full-time accountant to handle your books? The answer is contract accounting. You can hire an accountant to work for you as little or as much as you need, when you need them, and still ensure you have a competent accounting system and good financial reports. When and why should you outsource? Here are some reasons you should consider outsourcing.
As a small business, you, by definition, have a smaller limit on your financial and time resources. If you find you just can’t get everything done, including your bookkeeping, look at outsourcing. The accountant can take the burden off your shoulders and free up your time to do the other things you need to do to manage your business. In addition, you can save money. Having a full-time accounting staff costs up to 5% of revenues. Outsourcing your accounting can allow you to minimize and control this cost. Of course, you also have to figure in the money you save by avoiding costly mistakes in your accounting process. Outsourcing may well pay for itself if you avoid one big tax mistake!
The money you have to spend on an accountant is directly reflected in the skills of your accountant. From hiring someone to do data entry to a full blown CPA, there is a great difference in talent and skills. Once you spend your money and hire someone full-time you are committed to a level of service. If your accounting team isn’t quite there, or you are on your own, you should explore contract accounting services.
With a contract accounting arrangement, you can vary the level of skills and fees based on the individual services. Your accounting firm will utilize a bookkeeper for simple data entry, can upgrade you to one or more skilled accountants when doing reporting, and can even tap into a Certified Public Accountant (CPA) when needed. These flexible fees, skills, and services are an excellent way to get the best bang for your buck.
Your business may not be able to afford, or utilize, a full-time accountant based on size and revenue. If so, explore contract CPA services from firms such as CustomOne CFO & Controllers. These firms can provide you the support and services you need on a part-time or contract basis until you grow into a full-time accountant or CPA.
Outsourcing a CFO