Businesses need to keep up with their bookkeeping not only to understand their finances but also to safeguard themselves against legal discrepancies. Especially startups which are struggling through the initial setup phase for their business.
Although many businesses prefer to hire in-house accounting personnel, there are instances when independent help may prove to be more beneficial. For instance, if for example you are the manager of a leading sports team, then you would highly benefit from sports accounting professionals. This would allow you more time to focus on other aspects of the role and grow the team in other areas. Professional accountants can also re-confirm the authenticity of your books and records which helps you stay of all your accounts and bookkeeping. However, this is not the only benefit you will receive if you decide to outsource to a leading accounting partner.
Here are 8 signs when hiring an outsourced accounting and financial service may prove to be in the best interests of your business.
You cannot find previous records
The foremost task of the accounting team is to manage your accounts and financial records. And that too in a way which is easily readable. The prerequisite for accessibility is feeding data in an organized manner. This not only helps you access the information easily but also allows you to notice if anything is wrong within the record. So, when you can't find your records, it is surely a red-flag. It's time you should look for reliable accounting and financial management services. Moreover, small businesses and entrepreneurs often opt to manage their finances on their own, which may be foolhardy as they are not competent enough with the tax laws.
Data-entry keeps you from important tasks
According to a study promoted by the American Psychological Association, shifting between tasks can cause your productivity to decrease by as much as 40%. The figure itself is self-explanatory, why you should be looking for help with your financial and accounting management. Of course, you can't simultaneously manage your key responsibilities as the company's owner and data-entry tasks for accounting. Either way, you'll be losing your efficiency on both ends. Moreover, if data-entry is keeping you from your primary responsibilities than certainly its a sign you should hire someone. Once you have an outsourced accounting partner, you can rest assured that you can focus on more important tasks such as team management and production-related work. As an added benefit, you may find it easier to communicate with a single person for all your accounting needs, as is not the case when you have an in-house team. You need to manage a whole team and pay attention to all of them. Thereby increasing headcount for your company, and reducing your efficiency to scale your business in the long run.
You have IRS around your neck
One of the imminent fears that almost all businesses pertain to is an IRS audit. Although you may have an in-house team to manage your accounts, you may still receive a notice from the IRS. According to the experts at Click And Mortar Accounting, having an outsourced accounting expert go through your books and accounts can give you fresh insight. The details that might have been missed by your team, can be identified and rectified by your outsourced partner. In this case, if you have received a notice from the IRS, seeking help from your outsourced partner is the right thing to do. Moreover, receiving a notice also signifies that your in-house team is incompetent, and this surely is a red flag.
One way to really start out with knowledge of what the experts you hire need to know is online resources. Being ahead of the game is a must. For instance, researching GASB 87 ahead of time can be a crucial step to knowing what questions to ask when finding the right accounting professional.
You're struggling to manage your finances
Whether your budget is a mess, or your books don't match with your bank statement, this is a clear sign that your finances are ill-managed. There can be various reasons for such discrepancies. It could be because of any complexities in your spreadsheets or missed entries. Furthermore, if you keep finding your receipts and invoices in places other than accounts department, or you are constantly struggling to source your finances despite your business generating sufficient revenue, then it’s time you get into the intricacies lying in between. All in all, it's a signal that your finances are not up to date and there are certain things that you must get verified. Whatever be the reason, if you're struggling with your finances, then it is a sure-shot sign that you should seek help from an anonymous accounting and finance expert. Accounting blogs are a great way to improve your financial skills. These blogs have various articles on useful tips and advice on accountancy services, that will help you to manage your business effectively.
You find discrepancies in your records
As already mentioned, there can be discrepancies in your books and accounts. And there can be endless reasons for the same. One of the most common ones is when you use outdated bookkeeping software. Another possible reason could be human error. Regardless of the reason for which you're facing discrepancies in your data, they can be an invitation to IRS audits. Or even worse, if they find out about any tax frauds, as this could cost your business potential collateral. Most of the time, if a company faces an IRS audit, it may either be because of intentional human fraud or because of missing records from debit and credit statements. Having someone to guide you through the difficult situation, someone who does not relate to your business, or has sympathy for any of your employees, someone anonymous could be your best shot to get an unbiased report. This is the reason an outsourced independent accounting service should be your preference.
Your in-house team cannot give you a clear picture
Another telltale of inefficient accounting and taxation is when your team is unable to give you clear answers. As a part of their job role, your team needs to be regular and reasonable with filing your financial documents. Messed up spreadsheet data, misplaced receipts and invoices, and difficulty in tracking your money are some of the most common issues that small businesses face. Especially if the business is a new one. All of these problems are obvious in the inability of your accounting team. If you are also facing the same issues with your team again and again, then it's time you should seek help from someone outside your company.
The cost of managing an in-house team is bothering you
You have an in-house team to manage your accounts and tax-related documents. This obliges you to manage a reasonable headcount as well as pay them. Outsourcing, on the other hand, is a tried and tested method, which allows you to not only get rid of the unnecessary headcount but also to save money. The reason being these people usually offer complete packages at competitive pricing. So, in case you're finding it hard to pay your in-house team, then you should partner with an outsourced accounting expert.
Just when you are about to go on a hunt for an outsourced partner, you need to make sure of certain things. For example, you should go through their portfolio and the years of experience they have. This would allow you to have confidence in their work. Moreover, you can ask them to help you connect with their existing or previous clients to know their level of customer satisfaction. Likewise, you can also go through their reviews online to ensure that they have a good reputation in the market.
So now that you understand when you may need an outsourced partner and why you should assess your situation carefully, it is in your best interests to seek the right partner for your business. Failing to comply with which, you may have to regret down the road. Keeping a check on your business's credit and debit notes is the most crucial aspect of any business, as it can decide the overall profitability of the business. After all, the sole purpose of any business is to generate revenue and make profits out of it. So now that you understand when you may need an outsourced partner and why you should assess your situation carefully, it is in your best interests to seek the right partner for your business. Failing to comply with which, you may have to regret down the road. Keeping a check on your business's credit and debit notes is the most crucial aspect of any business, as it can decide the overall profitability of the business. After all, the sole purpose of any business is to generate revenue and make profits out of it. Hopefully, you’ll use these tips and make the right choice - hire reliable and trustworthy accounting and finance services today!