Firm or Internal: Which Accounting Solution To Pick

A lot of entrepreneurs who begin with their very own start up aren’t usually able to hire an accountant at the start. This means that most new entrepreneurs wind up putting on the accountant’s hat themselves and doing their own accounts. This means that they deal with nearly everything related to the business’ finances as well as the normal projects and functions of the business. This makes for quite a stressful job, unless they can hire the right kind of bookkeeping accounting services without any delays.

Firm or Internal: Which Accounting Solution To Pick

In fact, there are a lot of software out there right now that will help anyone become an amateur accountant with minimum effort. However, this may be okay for a small business but not for a growing one. As the business expands, so does the work that needs to be done on things like taxes and audits. It seems only logical, then, to hand the responsibilities over to someone who is a professional in this field, and knows what they are doing.

An accountant is a blessing

If you choose a good accountant, they will be able to help your business out with a whole lot of things, such as the planning of taxes, networking and even personal tax management. The decision to hire an accountant is one that is crucial to the success of the business. You basically place the fate of the entire company in the hands of this person and hope against hope that they are good at what they do. This is why you need to pick someone who has a lot of experience, both in the office and out, in dealing with finances.

However, there is another choice that you need to make before you find the right accountant for your business. You also need to make sure that you choose between hiring an outside firm to do your accounts, or an inside accountant to work within your business.

When is the right time to pick an accountant?

For the most part, small businesses that are just starting out don’t really have a huge amount of financial transactions going on. This means that hiring an accountant full time isn’t really something that you need right now. However, any business could benefit from getting their accounts reviewed on a regular basis. It is sort of like the annual check-up with your doctor. With the right type of regular financial review, planning and accounting, your business could really start to take off. This is way better than leaving all of your financial woes for the end of the year when that lovely gentleman comes by to collect the taxes.

Firm or Internal: Which Accounting Solution To Pick

When you are a business that is still in the initial growth stage, hiring an accounting firm might actually be a better idea. If you place the firm on a consulting basis, you will actually be able to avoid paying too much for accounting that isn’t critical at this point in the business’ life. In fact, the outside firm can actually help you avoid having to pay the salary and the benefits of an inside accountant full-time. You also could get better advice from a company than from an individual. Even if you have the best in accounting software right now, it is always better to keep a CPA company on retainer. There is software that allows these companies to manage your finances online over a secure connection.

Outside accounting firms

Typical functions that an accounting firm deals with include:

  • Preparing the tax returns
  • Preparing financial statements such as balance sheets, income statements and cash flow statements at the end of the fiscal year
  • Business analysis and providing advice

A firm usually knows exactly how every company has its differences. They understand that a business owner might try to expand upon the amount of work that the firm has to do, such as recording all the business transactions. However, it is recommended that you give such duties to an accountant on the inside, as there isn’t really a profit for the accounting firm to do the small tasks like this. It is better to let the firm handle the large scale finances.

In contrast to this, an inside accountant usually deals with smaller jobs such as transaction recordings, payroll management, balance sheets and weekly profit statements, and other jobs that don’t require a huge amount of information to be processed.