Reliable and accurate accounting is key to the success of any business, but many business owners struggle when it comes to the decision of whether to hire an in-house or outsourced accountant. Being able to clearly understand the advantages and disadvantages of each will help you to decide which type of investment is best for your growing business. Below we outline three common scenarios that business owners face around accounting.
Keep in mind that there’s no one-size fits all answer to whether or not you should outsource your accounting work. Therefore we would strongly suggest that you weigh your options carefully, and seek a professional opinion on your specific situation.
Scenario I: You have, or are considering hiring, a full time accountant for your office.
Having an accountant on staff may provide more access and day-to-day control, but these minor advantages can be quickly outweighed by the cost and inflexibility of the scenario. A full-time accountant requires the same competitive salary, recruitment costs, office space, equipment, supplies, software licenses, and benefits as any other employee. On top of being costly, your accountant’s experience will be limited to your business, giving them less exposure to different problems, and their ability to increase production along with demand may be more limited than an outsourced accountant.
Scenario II: You or an employee are doing, or are planning to do, your own accounting work in-house using simple software.
As a business owner you may be thinking that you know your business best, and can rely on software to let you take care of accounting needs. It certainly appears to be the quickest and most cost-effective way to get started, but the increased risk of costly errors won’t be worth it. An employee turning ‘bookkeeper’ for a growing business is also dangerous for several reasons, the most dangerous being that the employee will lack the accounting knowledge needed to properly advise a growing or struggling business. Professional accountants are able to provide an unparalleled level of advice, as they are able to see much further into your business than you think.
Scenario III: You have, or are thinking of finding, an accountant that takes care of your books.
With advances in technology and the cloud, outsourced accounting has become a scalable, affordable option for many small to large businesses. An outsourced firm can provide much of the same ‘real-time’ access you would have with an in-house accountant with the advantage of reducing the burden of manual reporting by internal employees, eliminating costly mistakes.
Every accounting firm has different rates, pricing policies, and client experiences, so be diligent in your research and speak directly with the firms. Does the accountant treat you like another paycheck, or do they feel like part of the team that genuinely cares about your businesses success? Here’s a quick checklist of questions to ask:
What are your response times for questions?
Do you have a fixed cost package?
Do you work solo or on a team?
Do you offer a full service accounting solution?
Do you offer professional business advice?
Do you offer professional representation in case of an audit?
These are just some of the things that we provide at Tristan CPA. To learn more about how you can save money and still have high quality accounting service, contact us or get started today with our Quickbooks Review service!