Ready to outsource your accounting services? Here’s how to pick the right solution.
Outsourcing accounting services can free up your time, prevent errors and even reduce your tax bill. But the dizzying array of solutions may leave you baffled. Do you need a bookkeeper or a certified public accountant (CPA)? Or, perhaps you want to handle your general accounting tasks, like accounts receivables, but hire a consultant for cash flow forecasting.
Some accounting firms oversee a broad range of tasks, whereas others specialize in a specific area. Discover the different types of accounting services available and learn how to select the right one for your small business needs.
Accounting services fall under general or financial accounting. General accounting refers to regular duties, such as recording transactions, whereas financial accounting plans for future growth. You can hire a bookkeeper to enter data and run reports or work with a CPA who provides financial advice.
Small businesses hire third-party or part- or full-time employees to handle tasks in the following areas:
In addition, you can hire consultants to design and set up your accounting system, provide financial planning advice and explain financial statements. You can outsource chief financial officer (CFO) services, such as succession planning and oversight of mergers and acquisitions.
When outsourcing accounting tasks, it’s crucial to think about the types of services you want to hand off to another person, what level of involvement you wish to have and how your needs will change in the next few years.
Often, small business owners outsource tax services first and add payroll assistance as their company grows. According to the National Small Business Association (NSBA) Small Business Taxation Survey, 68% of respondents use an external tax practitioner or accountant to prepare their company’s taxes. In contrast, the NSBA’s Technology and Business Survey found that 55% of small business owners manage payroll online, and 88% manage banking accounts digitally.
When outsourcing accounting tasks, it’s crucial to think about the types of services you want to hand off to another person, what level of involvement you wish to have and how your needs will change in the next few years. Create a list of processes and duties, and highlight those that you’re willing to outsource. Next, it’s time to find the right accounting service provider.
Now that you have an idea of what type of accounting services you need, the question is, who should you hire to provide them? For example, while a bookkeeper handles data entry, a CPA can speak on your behalf to the IRS and provide financial advice. Financial providers can be individual contractors, employees or full-service firms.
Before deciding, consider these questions:
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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