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There are several ways a small business can benefit when they choose to outsource their accounting.
Small business owners are constantly balancing any number of tasks and responsibilities, including—more often than not—a good share (if not all) of the accounting and bookkeeping. However, for most entrepreneurs, these are inordinately time-consuming, complex tasks, requiring a certain level of expertise which, in its lack, makes the process all the more involved. This naturally creates the sort of strain that can lead to costly errors.
Here’s where outsourcing comes in. By delegating accounting tasks to professionals, small business owners can save time, minimize costs, and ensure their financial records are accurate and up-to-date.
Read along below as we review the circumstances in which outsourcing accounting is most beneficial so that when the time comes, you can best determine whether it’s the right choice for your small business.
Record-Keeping Requirements
All small businesses need some method of record-keeping to satisfy the requirements of state and federal taxing authorities (e.g., the IRS). Although bookkeeping software may initially seem a viable, “easy” option, it can wind up more needlessly challenging and—again—time-consuming than business owners tend to envision. Outsourcing this function can save time even while engendering a cost-effective means to delegate duties, allowing owners to focus on other more “personally” essential aspects of overseeing their business.
Complexity of the Business
The more complex a business, the more necessary—and, necessarily, complex—bookkeeping protocol becomes. Companies with any type of inventory need accurate information to ensure their pricing covers both item costs and overhead. Those that extend credit to customers need to know who is paying, who is not, how long payments are taking, etc. Large companies can certainly afford in-house accounting departments that take care of these things, but outsourcing makes more sense for smaller, growing businesses.
External and Internal Users of Financial Information
“External users”—such as lenders, investigators, and regulatory agencies—require financial statements prepared by a CPA following Generally Accepted Accounting Principles (GAAP). For small businesses, the IRS or state taxing agencies will be the most likely external users. A proper set of books is required for completing a tax return fairly and accurately for such agents to review come tax season.
“Internal users”—i.e., typically, owners/managers—need cost-effective, consistent ways to access financial information at the drop of whatever hypothetical hat. Outsourcing to a professional provides precisely that.
Small Business Financial Management
A CPA who specializes in small businesses can help answer critical questions that arise in financial management, such as whether the business is maximizing profits, managing cash flow, budgeting appropriately, legally minimizing taxes while meeting all tax obligations, adapting to supply and demand—ultimately, regulating financial solvency.
Closing Thoughts
Outsourcing accounting services is a savvy, logical method to help small businesses keep track of their financials while minimizing costs and time that would otherwise be invested in (self-)bookkeeping. Ultimately, these services tend to be a tremendous help, allowing small business operators greater freedom to fulfill the myriad other obligations necessary in pursuit of financial success, sustainability, and growth.
Trust the Professionals at the Harding Group
Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for consultations and strive for open communication with our clients.
Are you interested in business advising, tax preparation, bookkeeping and accounting, payroll services, training + support for QuickBooks, or retirement planning? We have the necessary expertise and years of proven results to help.
We gladly serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of tax time, contact us online or give us a call at (410) 573-9991 for a free consultation. Follow us on Facebook, Twitter, YouTube, and LinkedIn for more tax tips.