small business accounting

36 Benefits of Outsourcing Your Small Business Accounting

Small business accounting can be a challenge to most business owners. Face it, you know your business and that’s what you enjoy doing. However, maintaining accurate, financial records, controlling costs, and monthly reporting on profits (or losses) is a critical part of any successful business.

As a corporate accountant for nearly 30 years, I worked with small to medium-sized companies, in Mexico and the US. I have contributed value to those companies using my knowledge, experience, and expertise. Our goal is to do your business accounting and financial reporting while providing you with peace of mind. We know the challenges and stresses that owning a business can bring.

The Benefits of Outsourcing Your Small Business Accounting

Here are 6 perspectives and the corresponding benefits of outsourcing to a professional accountant with experience and expertise in your industry such as Independent Accounting Services, LLC:

Nationwide Shortage of Accountants and CPAs

financial business frustrations
Worry less about your accounting and focus more on running your business doing what you love to do.

Current accounting industry trends state that there is a shortage of accountants and CPAs (Certified Public Accountants) nationwide, if not worldwide. This makes things more challenging when you want to hire a full-time accountant or CPA.

Therefore, if you cannot find a qualified and professional accountant or CPA for your team, outsourcing your business accounting is the answer. So, here are some reasons why you should outsource your business accounting. You can…

  1. Focus all your energy and passion on growing your business.
  2. Prevent errors and costly mistakes when doing accounting yourself.
  3. Have peace of mind—accounting can be very stressful for the non-accountant and it takes time to learn how to do accounting.
  4. Count on accurate financial information to make informed business decisions.
  5. Save money when hiring a fractional, qualified, professional accountant, and have accurate financial information so you can make informed decisions.
  6. Enjoy life with your family and friends knowing your accounting is in good hands.

Business Operational Perspective

financial operations
Your finances are an integral part of your business operations.

Reasons your accounting is vital from the business operational perspective. You need to…

  1. Know your actual business gross profitability.
  2. Know your cost of goods and/or services sold.
  3. Determine your pricing.
  4. Contain and reduce your cost of goods sold and overhead.
  5. Adjust your prices.
  6. Improve your gross profits and net income.

Tax Compliance Perspective

1040 tax form, taxes, income tax preparer, Yuma, AZ
Save on late fees, penalties, and interest by reporting your taxes accurately and on time.

Reasons your accounting matters from the tax compliance perspective. You want to…

  • Determine your business and/or personal income tax accurately.
  • Make sure your tax filing is correct and in compliance.
  • Plan your income tax within the US Tax Code.
  • Account for all your business income and expenses.
  • Pay your business and/or personal taxes correctly and on time.
  • Have confidence and peace of mind.

Cash Flow Perspective

cash flow
Knowing how your cash is coming in and going out is important.

Your cash accounting is an important tool to help you make informed business decisions. You need to…

  1. Know your cash availability and networking capital.  
  2. Anticipate your cash requirements and obligations in both, the short and long term, such as payroll, payroll taxes, purchases of goods or services, investments on equipment, machinery, and vehicles, rent expenses, business insurance expense, utilities, commercial lines of credit repayment, loans repayments, etc.
  3. Determine and project your cash sources, for example, cash from sales to customers, cash from investments, cash from loans received, shareholders’ contributions, etc.
  4. Determine and adjust your business costs and expenses.
  5. Strategize and plan your marketing and sales efforts.
  6. Be able to fund your personal and/or business tax liability, and your shareholders’ distributions, and determine the need for new investors.

Business Insurance Perspective

business insurance costs are affected by poor accounting
Business insurance costs are affected by poor accounting.

Your accounting is important, so insurance companies will want to insure your business. For instance, to…

  1. Obtain needed business insurance quotes (general liability, product liability, workers’ compensation insurance, etc).
  2. Negotiate the best prices and coverage with business insurance brokers.
  3. Have your insurance company deal with customers’ claims of losses, damages, etc.
  4. Be in legal compliance with required Workers’ Compensation Insurance.
  5. Establish credibility to do business with customers.
  6. Have peace of mind when your business assets are protected.

Other Stakeholders’ Perspective

Other stakeholders, such as banks, government, customers, vendors, and investors, require accurate accounting to assess sustainability:

To get that business loan to expand and grow, you need accurate financials to show the bank.
To get that business line of credit or loan to run your business operations or to expand and grow, you need accurate financials to show the bank.
  1. Banks depend on CPA reviews and audited financial statements, to pre-approve and extend credit to your business to ensure it can repay loans, lines of credit, and interest within the established maturity date.
  2. The government is interested in your accounting and methods to ensure your tax filing is correct.
  3. Vendors might request access to your D&B (Dun & Bradstreet) account to analyze your financial statements, review your credit history, and assess the risk of doing business with you.
  4. Customers might request to see your financial statements to evaluate your financial condition, your cash flow, and your profitability.
  5. Investors mostly want to see your business’ financials and accounting history so they decide if they want to buy your business or invest in it.
  6. Business Owners are interested in determining if their hard work and passion will return the investment they desire to retire in the future.

A Bonus Benefit of Outsourcing Your Small Business Accounting

As a contractor, you don’t have to pay an outside accountant a salary, nor provide benefits like health insurance. Thus, it is way more beneficial and cost-effective to hire an outside accounting expert.

As a professional accountant, I have extensive corporate accounting experience and expertise in diverse industries. We specialize in accounting cleanups, accounting catch-ups, and monthly accounting, as well as offering support to you and your business on the coordination and completion of CPA Reviews and External Audits. Also, we offer training in QuickBooks Accounting Software.

If you need to outsource your business accounting and would like to learn more about our services, please contact me to schedule a FREE accounting discovery call to see if we are a good fit.

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