Learn When and Why You Should Outsource Your Accounting
Written by Stephen King, Growth Force.
As a small business owner, you’d probably rather chatter about your products and services, than your accounting debits and credits (unless accounting happens to be what you do for a living).
As a small business owner, you’ve kept a close eye on expenses, knowing it’s your job to keep costs as low as possible. You may even have done the bookkeeping yourself in a cloud accounting software or looked over the shoulder of your bookkeeper to keep an eye on the finances.
Why? Because smart business owners realize that accurate and timely accounting is not just a necessary evil, but vital to keeping their business afloat.
However, as the business grows, most owners find that their time becomes more valuable doing other things. The finite hours in the day are better served by focusing on building the core business, not overseeing day-to-day bookkeeping.
When a business owner is no longer able to be involved in every aspect of a business, that is when the business begins to need more than bookkeeping. Most bookkeepers only know how to handle billing, collections, payroll, deposits, sales taxes, bank account reconciliation and basic financial statements.
A bookkeeper cannot supply what a business owner really needs in the growth stage of the business: management accounting.
Businesses need both financial and management reports for their company. Your business needs basic financial reporting for compliance and making sure your books are up-to-date. Management reporting is used to make business decisions backed by real-time data and key performance indicators.
When you reach a point when a bookkeeper is no longer sufficient and you need management accounting, you have reached the point in the lifecycle of a small business, where accounting suddenly becomes a more interesting topic of discussion.
Accounting Upgrade Choices:
Hiring a controller (paying salary of RM15,749/month* and 20% benefits)
Turning to a traditional Accountant (paying salary of RM4,071/month* and 20% benefits)
Outsourcing the bookkeeping and accounting to a accounting firm to handle all accounting needs
While you may have the energy to investigate all these options, the rapid growth of accounting services are taking place because it is often the best cost-value relationship for growing businesses with at least 30% less than building and maintaining an in-house accounting department.
However, the true value of outsourcing is not just saving money. Businesses choose to outsource to improve their core business focus, to avoid the risk and costs of hiring more employees and to gain access to outside expertise that they could not afford otherwise.
*Source from Indeed.com.my.