A Checklist to Help you Make the Best Choice for Your Business
When you’re in business, it’s all about the numbers. You want to do whatever you can to boost the bottom line. One way to do that is to evaluate your current financial processes. Should you do your own bookkeeping, or will outsourcing your accounting take your business to the next level?
“Costs are usually a business owner’s first concern,” says Debra Roubik, an economic and business consultant with VisionEcon, a Phoenix-area based company that helps small business owners with accounting, finance, and operations. “But I have clients that try to avoid hiring an accountant and end up paying hundreds of dollars an hour to a CPA to clean up the work of others.”
There’s plenty to be gained from outsourcing. “The No. 1 benefit is a second set of eyes that can find irregularities,” Roubik says. The second important benefit is the fact that it frees up a business owner to concentrate on activities that are critical to growing the business. The resulting increase in the firm’s growth could help support the expense of outsourcing an accountant in the first place, Roubik adds.
If you’re not certain whether outsourcing your accounting can help you, Roubik offers this checklist to help you decide. If you answer yes to more than two of the questions below, outsourcing may be able to help you have a more profitable 2018.
- Have you gotten more than one notice from tax authorities?
- Do you have multiple bank and credit card accounts?
- Are your revenue streams complicated? (i.e., does every sale fall into a repeatable pattern, or is every sale different in terms of deposit amounts, payment plans, etc.)?
- Are you working ‘in’ the business more than 50 hours per week?
- Do you have a large portion of your money classified in a line item titled ‘Ask My Accountant?’ [A classification in an accounting program for entries you don’t know what to do with.]
- Do you have unusual amounts in your financial statements such as negative sales or negative liabilities?
- If you devoted one day to growing your business could you more than make up the costs of accounting help?
- Do you start staring, freaking out, or does your blood pressure increase when you sit down to record accounting entries?
Even if you elect to put someone else in charge of your accounting, you should not wash your hands of the financials entirely. “Financial statements are meant to give us monitors of how we are doing, where we need to improve, which product lines are losing money, where we should spend our time and where our expenses are becoming exorbitant,” says Roubik. “Simply by hiring someone outside, or even in-house, does not mean you no longer need to observe your financials for trends, abnormalities, or excessive spending.”
The decision to outsource accounting is a personal one, but if your business is running into financial problems or you are feeling overwhelmed by bookkeeping, you should strongly consider seeking professional help. “In the long-run, it will hurt your business by continuing to do the things the way you have always done,” Roubik says.