Using an Accounting Service to Manage Your Small Business Finances

A business accounting service can be a relatively inexpensive solution to handle your complicated accounting needs. In your first year as a new business, you will likely discover your taxes are more complicated than ever before. Small business owners are eligible for a large amount of rebates, and they have a tremendous amount of flexibility in choosing how to claim deductions. This means there are plenty of errors to make when you handle your business finances. As a result, it is often the best use of both time and money to outsource your needs.

Business Accounting Service vs. Do-It-Yourself

If you are not an accountant, you likely lack the insight needed to properly control the flow of money through your business. For example, different expenses can be added as "cost of goods sold" than can be recorded under "capital expenses" of your business. Do you know the minute differences? If not, you should consider using an accounting professional to manage your books.

Even for accountants who own businesses, the time spent keeping the books for a business can quickly become a hefty job, taking you away from running your business operations at key moments during the year. Ultimately, hiring someone else to care for your books will save you both stress and time, freeing you to better control the aspects of your business that no one else can manage.

Business Accounting Service vs. Hiring an Accountant

Once you have decided you should use someone else to handle your business bookkeeping, the option typically arises to hire a full-time accountant for your business. Most companies with over 20 employees will hire at least one controller for the company's finances. This is an option for even a smaller business. However, it may not be necessary. 

Today, business accounting services can supply complete accounting management for even a large company. When you use a service, you will be assigned an account manager who is directly responsible for overseeing all work completed on your book. This individual is essentially your in-house accountant, but he or she comes at a fraction of the cost. Instead of paying one employee a full-time salary, by outsourcing you can pay this individual only when he or she is actually working on your books. Further, you do not have to supply benefits such as healthcare, or a 401k, that you may provide for an in-house accountant.

Protection from Audits and Tax Mistakes

Perhaps the best argument for hiring an outsider to handle your accounting is protection during the time of an audit. You have a third-party looking over your books before you file your taxes. This individual can lift some of the liability that you may be exposed to when filing in house or preparing a financial report. Further, this third-party can keep excellent off-site records of your bookkeeping. This eliminates the possibility of losing valuable information if your company experiences a fire, natural disaster or even a theft. Your records will be prepared and stored off-site, and they will be ready to go should you ever need them for a tax dispute.

blog comments powered by Disqus