While there are several businesses that may be able to get by without using an accounting service, there are few prospering and growing businesses that fail to take advantage of an accountant. As a business is first starting out, it may not have the funds to hire an accountant or to outsource its accounting needs. Nevertheless, to achieve optimum growth, every business owner should plan to hire an accountant or outsource its accounting needs at some point.
A small business that uses an accounting service is doing what is known as outsourcing. Outsourcing is when a business seeks help from the outside. In other words, when someone seeks the help of an accountant but does not hire him as a W-2 employee, he is essentially outsourcing his accounting needs. Here are eight benefits of a small business using an accounting service:
1. Pricing
Pricing is an important factor to consider. Hiring an accountant can be costly. However, many accounting firms offer fixed rates that are affordable. If the accounting firm does not offer fixed rates, many of them will gladly offer free consultations and quotes.
2. Software
The present accounting era takes full advantage of accounting software. Not too long ago, accountants did much of their work with a pen and pad. Nowadays, successful accountants spend much of their time mastering accounting software. This is advantageous for the business owner because he does not have the time to delve into such pursuits.
3. Analysis
How does a business owner know how his business is performing well? He can make certain assumptions based on his expertise, but his assumptions may be wrong. Accountants are up-to-date and educated in objective measurements of business performance. Through financial statement analysis techniques, accountants can keep their clients informed about the performance of their small businesses.
4. Costing
Costing techniques are better left to the ones who have been trained. Costly mistakes have been made in the business world whereby costs for jobs and projects were not properly allocated. As a result, the profitability reports for these jobs and projects were inaccurate.
5. Budgeting
Budgeting is an accountant’s specialty. Accounting firms can help small business owners determine what their spending should look like throughout the year and measure their goals based on actual numbers.
6. Forecasting
Forecasting can help small business owners project what will take place throughout the year. However, forecasting strategies are another of an accountant’s specialties. These can be modified throughout the year using historical data.
7. Tax Planning
Many businesses fail in the realm of tax planning. Small businesses cannot avoid tax season. The accountant is equipped with strategies to decrease a business owner’s tax liability.
8. Tax Preparation
While tax software has simplified the process of tax preparation for individuals, tax preparation for many small businesses is better left to a professional. The IRS has strict laws concerning taxes. The accountant can ensure the business owner is abiding by them.
Using an accounting service will provide a small business with numerous benefits and professional expertise. Look for local accounting firms that can provide the services your small business requires.
