On a regular basis, I speak with business owners who are reluctant to outsource their accounting and financial responsibilities. Often their reasons are based on myths surrounding the idea of outsourcing or even just the term itself. For the companies that do embrace this option, I’ve seen them experience higher efficiency, less stress, and more opportunity to grow their business.
Outsourced accounting services can seem like yet another daunting task in getting your fledgling business up and running. However, poor financial management can be a cause of small business failure. Establishing a strong accounting system is an important part of making your business a success.
This blog is here to help you better understand the myths that business owners believe about outsourced accounting services, and realize the true benefits of business accounting services.
What does an Accountant Do?
An accountant’s job is to compile, analyze, verify and prepare financial records to ensure lawful, efficient and compliant business practices. The accountant monitors and records the flow of money through a business or organization. They are responsible for their company’s financial health.
Myth #1: Accounting services are only for big companies
Your small business may not need its own in-house bookkeeping team, but even a small business will need to manage cash, make budgets and pay taxes. Ask yourself: “what kind of accounting services does a company my size need? Do we need an entire staff of accountants in the building, or would we benefit from an outsourced bookkeeping solution?” No matter what size the company is, your books and your taxes should be handled by experts.
Myth #2: Accounting services will be expensive
When you are starting a new business, you have a lot of expenses and need to save money where you can. However, not setting up a good accounting system can cost you more money in the long run, especially when it comes time to pay taxes. Some new business owners try to take on the accounting themselves rather than hire someone else to do it. I’ve had many clients come to me after years of putting off the expense of an accountant. They often find that they would have saved money if they had hired a professional.
And the cost of an accounting service may not be as high as you think it is. There are many affordable accounting and bookkeeping solutions out there for the small business owner. Many companies offer different levels of service and depending on the level of service you need, outsourced bookkeeping can be less expensive than an in-house staff accountant. A professional accountant can also help you save money in your business. Accountants with years of experience working for different businesses will be able to provide a valuable financial perspective.
Myth #3: Accountants only do taxes
There is a misunderstanding that accountants only do your taxes. For business owners, it is important to realize that accountants can help you keep up-to-date with your books all year. So come year-end, calculating your income and expenses will be more accurate. In addition, if your company does not implement effective accounting habits, it is possible that you are leaving money on the table, exposing yourself to unnecessary financial risks. Fortunately, many businesses are now recognizing the importance of an accountant’s innovative skillset in contributing to their success.
Myth #4: Small Businesses don’t need accounting, I can handle it myself
This means that as a small business owner, you would say that you don’t need to budget, forecast financials, learn about trends in your business, or know the latest, greatest tax advantage. We have clients that are as small as a one-person business service making only about twenty-thousand a year as well as clients in the multi-million dollar range, and it is equally important to both of them.
Your accountant will be following your financials for the entire year, and everything should be neat and clean at the time of filing your taxes. Also, your accountant should give you monthly financials specifying areas of improvement, ensure reports are ready for possible loans, help you make financial decisions, enable you to make the most of recent tax advantages and tell you if your business will trend towards lower or higher revenue in certain months based on history. This is all needed information, and once a client jumps on board and starts using our services, they are often amazed that they were ever able to run their business without our services.
Myth #5: Accounting is just math
An accountant’s abilities are more related to business acumen than mathematical competency. In addition to formal educational training such as gaining a business and accounting degree- accountants actually require a range of skills to stay relevant. These skills include strong interpersonal communication, customer service, analytical thinking, and even writing.
The government has created a complicated industry of rules, regulations, and guidelines for personal and business taxes. Accountants know all the ins and outs of these laws, and can best help you apply them to your particular situation.
Limitless Investment & Capital Outsourced Accounting Services in Denver & Phoenix
If you’re looking for professional and efficient accounting services in Denver or Phoenix, get in touch with the accounting experts at Limitless Investment & Capital. We are a one-stop-shop for all of your accounting needs, from bookkeeping and tax preparation to payroll and consulting. Our accounting firm will help you lower your taxes, manage your cash flow, and maximize your business potential. Get started today by filling out our Contact Us form.