TK Accounting & Consulting

Outsourcing has become a new wave for many small to large companies. Hiring trusted accounting companies versus an in house accountant frees up time and resources that the company can utilize elsewhere. Here are some reasons that many businesses have begun to outsource their accounting needs.

SAVING YOU MONEY

Outsourcing first and for most is cheaper than hiring an in-house accountant. Depending on the size of your company, you want to look at it in terms of hours. Outsourcing this work will include a contract. Typically there is a set price for the number of hours spent on the work. Some tasks can be more complex than others. For example, having messy books will take a bit of time in the reconciliation department. Other tasks such as setting up payroll or an S-Corp is a set price because hours spent on that don’t vary drastically from client to client. But, even base fees versus hourly fees of bookkeeping firms have proven to be much more affordable.

Say you sign up for services with an accounting firm for weekly bank reconciliations, accounts payable, accounts receivable, the price is $600.00 (for example) a month for bookkeeping services. As well as $750.00 for tax filing (for example) The yearly cost for this comes to $7,950.00. Now, if you hire an accountant, their salaries can range drastically. Anywhere from $25.00 to $50.00 plus, an hour. But it doesn’t stop there. Hiring a new employee, there are now additional fees (i.e. background checks, onboarding and training, taxes, benefits, additional training if necessary, etc.) At a minimum, an hourly accountant making $25.00 an hour, working 30 hours a week with no benefits. A company is paying around $39,000 yearly. You can see the drastic jump in price is a major reason that companies are shifting gears by outsourcing.

2. SAVING YOUR INVESTMENT

The second reason for the outsourcing falls under the shell of your business, you no longer need to invest in this branch of your company’s development. Accounting and bookkeeping can be risky. Penalties, interests charges and even litigation are all pitfalls of accounting no matter what business you’re talking about. Unfortunately, these risks can even come from within your own business. It’s not unheard of for your own employees to alter records for their own benefit. Embezzlement, as it’s known, is a common subject in news.When you outsource a good company, you’re counting on the fact that they employ the most qualified and trustworthy within that field, therefore minimizing risk. These are experts who understand the ins and outs of laws, regulations, gov compliance, taxes and human resources.With this area under control, it allows for company resources to be spent elsewhere. Since accounting is being handled externally, there is no need to worry about it. Your accountant will (or should) update you quarterly or even monthly depending on your contract on your companies financial status. They are also always available to go over anything that may cause you concern.

3. CREATING MORE FREEDOM

The third benefit is probably one of the best, freedom. Freedom to focus more time on other opportunities of the company. Your energies can now be shifted from the financial stress of running your business. To how to, properly run your business. In the sense that you’re able to focus on its core. In turn, giving you the freedom provide better services as well as additional services to your clients.

4. MORE OPPORTUNITIES FOR GROWTH

The last benefit would be that you can now reach broader areas within the company.

For example, say initially you were focusing on the mid-west region. You didn’t have the time or energy to research the market in the north but you know that your services/products could benefit so many others, more than just your area. If you have outsourced a CFO/Business consultant and accounting firm (some are combined.) They have now done the market research and ran the numbers to reach your target audience. They will present you with this information and a proposal to get you where you want to be. You are now able to stretch as far as the eye can see with your business. The opportunities are truly endless when you hire a firm to take specific duties off your plate. Finding the right firm for you makes all the difference.

FINDING THE RIGHT ACCOUNTANT/CPA

Doing your research, asking your friends, checking testimonials. Make sure to develop a list of question for your advisor. This way you know exactly what you are getting for your investment.

There are good accountants and there are bad accountants. It’s not a lie that accounting isn’t for everyone, but when it comes to your financials, you have to be wary.

Organization

Why does this matter?

You are trusting them to organize and bring order to your financial situation.
If you meet with your accountant and they aren’t prepared, have their or your documents organized. If they aren’t answering your questions with straight forward answers or confidence.
Just RUN.

Accountability

What should they be accountable for?

Your accountant should be helping you follow through on your financial commitments. (i.e. timely payroll, monthly or quarterly reports, answers regarding your reports.)
They should put your goals as the priority.
Providing monthly reports and scheduling a regular review of the reports to go over the progression towards achieving your goals.
Your advisors should be available to consult with you during important decision making that will directly impact your business and it’s growth.

Proactive

This should speak for itself

Your accountant should always should anticipate situations. You shouldn’t have to remind them to run your payroll or to start preparing your taxes. The communication should be open for them to start preparing for all your life changes and relay this information to you as often as possible. Having a schedule is the best way to stay ahead, especially for services that continue weekly or monthly. Reaching out to you or your team for statements that they don’t have access to. Providing information about changes to your report, rather then you having to ask.

Education

Credentials aren’t necessarily important for everything.. but for accounting, they’re important.

To be able to correctly balance your books, run your payroll, process your sales tax. Your accountant needs to know how to do this. Whether through obtaining their CPA license, or obtaining a degree in accounting. This education matters, as well as continued education. Ask your accountant how they stay up to date on the new tax laws? Are you aware of the newest technology for bookkeeping or record tracking? Have they attended seminars recently that help them continue their education?

These are all things you can ask your accountant to test how dedicated they are to their practice.

Partnering up

Does your accountant treat you with the level of respect a partner should?

You and your bookkeeper need each other equally. This is why it should be considered a partnership, technically you are very much working together. They should be able to answer your questions and take the time to clearly understand your background, philosophy, your specific needs, and goals, and work with you collaboratively and on your behalf. (with your approval of course) There should always be a level of transparency around their costs and compensation.

Should I hire an outside Accountant?

What Makes an Accountant “Good”?