When small business owners come to a point where they can no longer handle their firm’s accounting all by themselves, they’re forced to make an important decision: struggle on their own or hire an in-house accountant. By outsourcing this work to a business accounting service, they can find a comfortable middle ground.
What is a Business Accounting Service?
If you’re a small business owner, you’re probably too busy with other things to take care of your company’s accounting. However, it may not be a good idea to consider your own accounting might be understandably considered the breadth of your duties. The activities involved in accounting are essential to everything businesses do, and neglecting them can lead to serious negative consequences. If there aren’t enough hours in a day for you to handle your company’s finances, it might be time to hire a business accounting service.
A business accounting service is an outsourcing firm that provides small businesses with individualized accounting services on an ‘as needed’ basis. Typically, small businesses hire a business accounting service when they can no longer manage their finances alone but aren’t ready for a full-or part-time accountant.
Broadly speaking, outsourcing accounting firms offer the same services as in-house accountants. Unlike an in-house accountant, however, they only work when you need them and not on an everyday basis. In the next sections, we’ll have a look at the type of services you can expect when you outsource your accounting.
Tax Consulting Services
Similarly, the biggest reason a small company uses a business accounting service is to help manage and file their end of year taxes. While tax preparation is certainly a valuable service, the best tax consultants do more than fill out a few forms each spring.
The best tax consulting services work with your small business year-round. They keep you abreast of any relevant new tax codes. They also revisit your finances frequently to help you reduce tax liability and locate deductions you might not have claimed on your own.
Bookkeepers record, track, store, and retrieve the entirety of your company’s financial transactions. The types of transactions bookkeepers typically handle include:
Gathering and recording customer receipts
Billing customers for goods and/or services sold
Handling employee payroll and tax information
Recording and confirming vendor invoices
Generating financial reports
As you can see, bookkeeping is an integral part of your small business’s daily operations. Some companies hire a bookkeeper as a regular employee, but outsourcing this work is rapidly becoming the norm.
Preparing Financial Statements
This is an area that small business owners neglect at their peril. Financial statements include things like cash flow statements, balance sheets, and income statements. Because they present owners with critical financial data, these statements are essential to any successful business.
A top-notch business accounting service will do more than just prepare these important statements. They’ll also explain the information contained in them to help you make informed business decisions.
The term ‘assurance services’ refers to a distinct set of advanced accounting services performed by CPAs. Assurance services can include an assessment of financial documents like contracts, bank loans, and finance-related websites. A CPA deems documents valid once they review them.
Assurance services come into play when your business enters third-party financial relationships; they provide guidance through the risks and opportunities these relationships present to help you make better decisions. Assurance services are critical to market success during the information age and are especially helpful during times of rapid growth.
Accounts Payable and Receivable
The way you manage these two areas will go a long way toward determining the success of your business. Mistakes in accounts payable and receivable can lead to costly redundancies, a reduced credit score, and a restricted cash flow. Fortunately, you can avoid all this with the right business accounting service.
These firms create bill organization systems that ensure timely payments and prevent you from paying for the same thing twice. Keep cash flowing into your business by increasing your collection rates and which will get you paid faster.
Bank Reconciliation and Forensic Accounting Services
These are two key accounting tasks that businesses overlook far too often. A bank reconciliation is a process that compares the accounting information you’ve compiled to what’s contained in your bank statement. They’re used to help spot discrepancies within your accounting records, possible fraudulent activity, and bank errors.
Exposing illegal financial activity is obtained through forensic accounting. There are many crimes that necessitate the use of forensic accounting, but embezzlement is the most common.
The Upshot of Business Accounting Services
As a general rule, business owners are driven and intelligent people. Furthermore, they’re capable of teaching themselves how to handle just about anything that relates to their business. However, this usually doesn’t apply to the fine-grained accounting skills their business will eventually need.
There are complexities involved in business accounting that make it nearly impossible to handle without a four- or five-year degree and years of experience. In the end, it comes down to an effective division of labor. Owners should do what they do best and let a business accounting service take care of the numbers.
About Lena Georgiev Consulting Services
Lena Georgiev provides accounting, bookkeeping and tax solutions that fit the needs of small businesses and individuals. Lena also has project management as well as life coaching skills which help clients with organization and real life advise. Call now for a free estimate on services!
Email: [email protected]
Phone Number: 847-420-8242
License Title: Registered Certified Accountant in the state of Illinois
License ID: 239.002263