Small Business Financial Article
Rich Best has spent 28 years in the financial services industry, as an advisor, a managing partner, directors of training and marketing, and now as a consultant to the industry. Rich has written extensively on a broad range of personal finance topics and is published on several top financial sites. Recent books include The American Family Survival Bible and Annuity Facts Revealed: What You MUST Know Before You Invest.

Is it Time to Hire an Accountant?

Is it Time to Hire an Accountant?

The reality is that most businesses cannot possibly survive past the launch stage without a structural approach to cash flow management and planning. It’s certainly not the most glamorous part of running a business, but, even from the beginning, it is essential for a business owner who envisions a successful and profitable future.

What’s the Cost of Not Hiring an Accountant?

You may be well equipped to do your own accounting, but what is it really costing you? Suppose your efforts at building the business are projected to generate $200,000 in profits at some point. In that case, it will cost your business at least $100 an hour to utilize your bookkeeping services or as much as $50,000 annually in lost profits. The one-year cost for an outside bookkeeper could be as low as $5,000.

The cost of not outsourcing activities, such as bookkeeping and accounting, becomes much more pronounced and potentially more detrimental to your business prospects when they interfere with essential business development activities. Every hour spent on non-essential activities is one less hour spent in marketing your business, networking with prospects or client relationships, or refining your sales process. The cost to your business soon becomes immeasurable.

Another hidden cost of poorly kept books and records is the premium you are likely to pay when it comes time to file your taxes—the likelihood of overpaying taxes increases due to missed deductions. You are almost guaranteed to overpay your tax professional, who must spend additional time organizing and compiling your books and records. If you choose not to utilize a tax professional, you can certainly count on an excessive amount of your time spent doing the same. The ultimate cost to you is the time and expense of an audit commonly triggered by improperly filed business tax returns.

Start With Online Accounting Services

Online accounting services can provide additional layers of accounting functions that can accommodate a growing business’s expanding needs. Using sophisticated data encryption and communications technology, the service can source documents, and data can be uploaded and stored on web-based applications, which allows for remote access. All entries can be recorded and accessed from any remote location.

Beyond general journal and ledger bookkeeping, they can also provide accounting reconciliation services, inventory reconciliation, payroll processing, cash flow management, monthly statement preparation, budgeting, and taxation services. Additionally, they are best positioned to assist with establishing or recommending accounting procedures. They are usually well-staffed with experts who routinely work with accountants in the preparation of year-end financial documents and tax filing.

Their services are usually billed on a fixed monthly rate, which can be advantageous from a budget planning standpoint. Some will bill hourly, and there are also services available on a pay-for-performance basis.

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